2) World Platinum Demand By Application
Source: Johnson Matthey - Data through Nov 2016 Other 3.7% Petroleum 2.0% Medical & Biomedical 3.0% Jewellery 35.2% Investment 3.7% Glass 1.7% Electrical 2.2% Chemical 7.2% Autocatalyst 41.2%
3) World Palladium Demand By Application
Other 1.4% Jewellery 2.1% Investment -3.4% Electronics 9.1% Dental 4.3% Chemical 4.2% Autocatalyst 75.4%
Source: Johnson Matthey - Estimate for 2016 is 9.685 million ounces. Data through Nov 2016 4) World Platinum Balance/Supply Demand
200 400 600 800 1000
-1200 -1000 -800 -600 -400 -200 0
Est Source: Johnson Matthey - Data Updated Nov 2016 5) World Palladium Balance / Supply - Demand
1000 2000 3000
-3000 -2000 -1000 0
Est Source: Johnson Matthey - Most Recent: -651 through Nov 2016
These estimates could be too conservative if Russia or South Africa experiences any reduction in production or a restriction of exports. Output from both of these countries can be volatile, especially South Africa, which has faced repeated labour issues in recent year. We have already seen a significant increase in the amount of exports from Switzerland into China and that could mean the rest of the world will be fighting for supply to fulfil its needs.
PLATINUM GROUP METALS AND ETHANOL The global automobile fleet has reached record levels, and it is expected to continue to expand. Besides reducing electricity generated by coal, countries like China and India realise that applying clean-air technology to vehicles has to be undertaken quickly to address other important aspects of pollution. Catalytic converters are critical to these efforts and palladium and platinum are two major components in their manufacture. As of November 2016, 42.8% of global platinum usage was for auto catalysts, and 36.5% was for jewellery. For palladium, 75.4% of global demand was for auto catalysts.
PGM PRICE OUTLOOKS Changes in investment and jewellery are major swing factors for PGM demand, but auto catalyst usage appears to be on the rise, and the prospect of better jewellery and investment demand should dovetail with the direction of the global economy. The doubling of platinum prices in 2016 and the $186 per ounce rally in palladium have already started to factor-in the favorable supply and demand situation, but we wouldn’t underestimate the potential for prices to return to their 2014 highs. For palladium, such a move would produce a $145 rally from late January levels. For platinum, it would result in a $500 rally.
30 | ADMISI - The Ghost In The Machine | January/February 2017
Thousand Ounces
Thousand Ounces
1
560
2
410
3
1020
4
2020
5
1050
1 2 3 4 5 6 7 8 9
6 1335 7 1750 8 635 9 680
10 11 12 13 14 15 16
10 -530
-370 -500 -330 -50 -55
355 -80 -220 635 -25 -450
-310 -710
-856 -457
-422
11
1185
12
-1113
13
-500
14
-1861
15
-356
16
-651
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