WPIC: Platinum recovered from recycling surged 9% in 2016

MONTREAL (Scrap Monster): The World Platinum Investment Council (WPIC) has released its Quarterly Report for Q4 2016. The report comprises of a full year 2016 review, Q4 review and forecasts for 2017.As per the report, the previous year was a year of mixed fortunes for the global platinum market. Constraints in global supply led to fifth year of deficit for the market. Total platinum supply increased, whereas the global demand decreased marginally. Meantime, the supply from recycling increased significantly by 9% over the previous year in 2016.

In its full year review, WPIC noted that total platinum supply increased marginally by 1% in 2016 to 7,965 koz. A fall in primary supply was offset by rise in secondary supply from jewellery and autocatalysts.

Global refined production declined by 2% to 6,030 koz in 2016. Stoppages and restructuring operations at mines resulted in reduced supply from South Africa. The supply from the country declined by 5% to 4,240 koz, but still accounted for over 70% of the global refined output. On the other hand, supply from Zimbabwe and North America increased during the full year 2016. The total mining supply amounted to 6,100 koz, with producer inventory sales accounting for 70 koz. Also, there was net reduction in refined stock in 2016.

Platinum supply from recycling has increased by 9% over the previous year to 1,865 koz during the year. The volumes recovered from jewellery and autocatalysts reported strong growth of 110 koz and 45 koz respectively. Global jewellery recycling totaled 625 koz in 2016, significantly higher by 21% over the previous year. Higher scrap steel prices led 4% growth in autocatalyst recycling in 2016.

Meantime, platinum demand in automotive applications has increased by 1% to 3,405 koz in 2016. Global platinum jewellery demand tumbled by 11% year-on-year to 2,565 koz, mainly on account of huge drop in demand in China. On the other hand, demand in India rose 26% during the year, though at a considerably slower rate than 2015. The demand recovered strongly during the second half of the year. The demand improved by 6% in North America. Also, industrial demand for platinum totaled 1,760 koz in 2016, higher by 5% from 2015.

The total investment demand was 505 koz in 2016. The bar and coin demand fell to 430 koz, lower by 95 koz from 2015. The decline of ETF holdings reduced during the year with overall ETF holdings declining by 10 koz during the year.

The overall demand edged higher by 12% during the fourth quarter of the year. The minor drop in demand from industrial sector was offset by increased demand from automotive and jewellery sector. Investment demand remained strong during the quarter, with net sales of bars and coins and ETF holdings posting significant increases over the previous quarter. The total supply during the quarter amounted to 1,940 koz, falling by 75 koz from the previous quarter. Refined production dipped below 1,500 koz in Q4 ’16. Meantime, platinum recovered from recycling grew significantly by 28% to 480 koz.

According to WPIC, total platinum supply is forecast to fall by 4% to 7,660 koz in 2017. Refined production is expected to decrease by 2% to 5,920 koz. Total mining supply is expected to fall by 3% to 5,900 koz. Secondary supply is predicted to decline by 6% to 1,760 koz. Global demand is projected to decrease by 6% to 7,780 koz this year. Platinum recovered via recycling is forecast to fall by 6% year-on-year to 1,760 koz in 2017.