Lonmin CEO Sees Platinum Market Shifting To Supply Deficit In 2012
PGM Consumption To Benefit From ‘Pent-Up’ Auto Demand
“Pent-up demand in the auto sector, due to the aging car fleet, is delivering a gradual auto-sector recovery,” Farmer said. “Demand therefore could surprise on the upside.”
He cited a report from LMC Automotive, which late last year acquired the auto forecasting division of J.D. Power and Associates, calling for global auto sales to increase to 81 million units from 77 million last year.
The Lonmin CEO commented that Japanese industrial production is recovering from an earthquake last year, which in turn would mean more PGM demand from the country’s automakers. U.S. auto demand is accelerating as car owners start looking to replace vehicles that now have an average age of 10.8 years, Farmer said. European car demand is expected to remain flat for the next two years, but Chinese demand growth is expected to be around 10%.
Additionally, Farmer said, investment demand for PGMs has picked up, with holdings of metal to back global platinum exchange-traded funds up some 30,000 ounces so far in 2012 to 1.3 million ounces. Palladium ETF holdings are up some 60,000 ounces to 1.65 million.
PLA Price at posting:
7.8¢ Sentiment: Buy Disclosure: Held
