Implats expects platinum deficit As demand rises company expects platinum prices to reach up to $1800/oz with palladium expected to fetch up to $850/oz rhodium possibly $1650/oz ALLAN SECCOMBE Published: 2012/02/17 07:24:52 AM
IMPALA Platinum, the world’s second-biggest producer of the metal, forecast relatively large deficits in platinum and palladium this year as demand from the vehicle sector picks up and supply falls in SA.
Implats forecasts the platinum market will reflect a 335000oz deficit in the coming financial year compared with a surplus of 120000oz this year, marketing director Derek Engelbrecht said at the group’s interim results presentation yesterday.
"For the next five years demand growth, underpinned by the continued fitment of emission control systems in light and heavy-duty diesel and off-road vehicles, together with the widespread availability of clean diesel in China, will see the end of surplus markets," he said.
"For 2012, noticeably lower South African production will feed into stronger demand and drive the market into a deficit of 335000oz. The size of this deficit may come as a surprise to many," Mr Engelbrecht said.
Supply from SA, the world’s largest source of platinum, is forecast to fall to 4,6-million ounces from 4,7-million ounces this year. The vehicle sector will absorb 3,75-million ounces compared with 3,45-million this year.
Challenged by an analyst on the rise in vehicle demand for platinum against a weak economic backdrop, Mr Engelbrecht said conversations with customers and independent consultants had given the group figures of which it was "reasonably confident".
Implats forecast platinum prices would average between $1450/oz and $1800/oz this year. Palladium would average $600/oz-$850/oz and rhodium would range between $1400/oz and $1650/oz, he said.
Implats sold less of its four key metals — platinum, palladium, rhodium and nickel — in the first half of its financial year to the end of December. There were several reasons for this, including not wanting to sell in "soggy" markets in December, he said. Prices in December fell to about $1360 compared with above $1600 now. "We believe that decision was well vindicated given the price rise as well as the strike," he said.
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