Platinum Supply and Demand

Platinum Price

Platinum is considered an industrial metal due to its largely industrial uses. During times of economic stability or growth the demand generally rises. During economic uncertain times the demand generally falls.

A large component of overall platinum demand is platinum's use as a autocatalyst to control harmful vehicle exhaust emissions. Johnson Matthey produced an interesting report in 2013 called "The components of autocatalyst demand". Of particular interest is the breakdown of different combustion engine vehicles, light duty gasoline (LDG), light duty diesel (LDD), heavy duty vehicles (HDD), and non-road mobile machinery (NRMM) and their associated platinum demand. In the wake of the Volkswagen emissions scandal the price of platinum fell and the price of palladium rose due to the market's belief that gasoline cars become more popular over diesel cars in the future which would increase demand for palladium autocatalyst and decrease demand for platinum autocatalyst. Volkswagen is aspiring to be a World leader in e-mobility (electro mobility) by 2018, and some have speculated that the push towards e-mobility has been accelerated by the fallout from their diesel emissions scandal.

Lastly, the majority of World platinum supply comes from South Africa, and in particular the Bushveld Igneous Complex (BIC). Over the years platinum producers in South Africa have had issues with strike actions from unions, with the most recent in November 2014. According to the Africa Leader newspaper (Platinum mine workers in South Africa return to work), it affected 40% of the World's platinum production during the strike action.


Platinum Supply History

Platinum supply in 2015 was from South Africa (72%), Russia (12%), Zimbabwe (6%), North America (6%), and Others (3%).

The platinum supply and demand for 2015 were:

  • Total Supply was 6.100 Moz.
  • Total Gross Demand was 8.205 Moz.
  • Total Recycling was 1.725 Moz.
  • Total Net Demand was 6.480 Moz.
  • Movement in stock of -0.380 Moz.

The platinum supply history from 1975 to 2012 was compiled by Johnson Matthey. Please note that before 2005 "Zimbabwe" was included in "Others".

The platinum supply history from 2013 to 2015 was compiled by SFA Oxford.

    

Source: World Platinum Investment Council - Supply and Demand Historic Data - Johnson Matthey and SFA Oxford


Platinum Demand History

Platinum demand in 2015 was made up of automotive (42%), jewelry (35%), industrial (20%), and investment (3%).

The platinum demand history from 1975 to 2012 was compiled by Johnson Matthey. Please note that:

  • Before 1980, "Investment demand" is included in "Other" estimates.
  • Before 1998, "China" demand was not categorized.
  • Before 2005 "Medical & Biomedical" was included in "Other".
  • Before 2005 "Jewellery" and "Electrical" demand is net of recycling (Demand = Demand - Recycling).

The platinum demand history from 2013 to 2015 was compiled by SFA Oxford. Please note that non-road automotive was added to "Other".

    

Source: World Platinum Investment Council - Supply and Demand Historic Data - Johnson Matthey and SFA Oxford


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Platinum Recycling History

The platinum recycling history from 1982 to 2012 was compiled by Johnson Matthey. Please note before 2005 "Jewellery" and "Electrical" demand is net of recycling (Demand = Demand - Recycling). Thus since demand is greater than recycling, they are not shown in recycling chart before 2005.

The platinum recycling history from 2013 to 2015 was compiled by SFA Oxford. "Electrical" recycling in Johnson Matthey was assumed to be what "Industrial" is in SFA Oxford.

    

Source: World Platinum Investment Council - Supply and Demand Historic Data - Johnson Matthey and SFA Oxford


Platinum Net Demand History

Platinum net demand is gross demand minus recycling.

The platinum net demand history from 1975 to 2012 was compiled by Johnson Matthey.

The platinum net demand history from 2013 to 2015 was compiled by SFA Oxford.

    

Source: World Platinum Investment Council - Supply and Demand Historic Data - Johnson Matthey and SFA Oxford


Platinum Movement in Stocks

Movement in stocks is the difference between net demand and supply. This indicates whether platinum supply is in a surplus or deficit.

The platinum movement in stocks history from 1975 to 2012 was compiled by Johnson Matthey.

The platinum platinum movement in stocks history from 2013 to 2015 was compiled by SFA Oxford.

    

Source: World Platinum Investment Council - Supply and Demand Historic Data - Johnson Matthey and SFA Oxford