The World Platinum Investment Council (WPIC) Platinum Quarterly has raised the predicted platinum market deficit for 2017 to 120,000 oz for the year. The upward revision comes after confirmation that the market ended 2016 270,000 oz in deficit, a deeper shortfall than previously estimated.
- Automotive demand remains resilient
- Total supply is predicted to fall by 4% in 2017
- Q4 2016 turnaround in ETF buying boosts investment demand.
2017 will be the sixth consecutive year that global platinum consumption has outstripped supply, with total supply, from mining and recycling, this year predicted to fall by 4% compared to 2016.
The latest Platinum Quarterly report, the tenth published by the WPIC since 2014, also reveals that there was a marked increase in the buying of platinum Exchange Traded Funds (ETFs) in the final quarter of 2016, which saw net buying 200,000 oz higher than in the previous quarter.
Demand from the automotive sector defied some expectations, ending the year up 1%. The report reveals that year-on-year platinum demand from the Western Europe automotive sector has been higher in every quarter since the third quarter of 2015.
Jewellery demand in 2016 was down 11% on 2015, with 2017 predicted to see demand stabilise with only a small 1% decline during the year. However, the Indian market is expected to continue its strong growth with demand predicted to be up by more than 11% this year.
Paul Wilson, Chief Executive Officer of WPIC commented: “The upward revisions of the 2016 deficit and the forecast 2017 deficit, which would be the sixth consecutive annual shortfall, show that the platinum market is tightening amid solid demand and increasingly constrained supply. It is notable to see that buying of platinum ETFs spiked significantly at the end of the year boosting investment demand for platinum. This has continued into the first quarter of 2017 as the price of platinum has risen. Should investment demand in 2017 end up matching that of 2016, this would significantly offset the decrease in total demand currently forecast for 2017. [This] report is also a timely reminder that automotive platinum demand remained strong in 2016.”