Robust ETF Demand Drives Platinum Investment

SEATTLE (Scrap Monster):  The Platinum Quarterly Report published by the World Platinum Investment Council (WPIC) suggests deficit market during the initial quarter of the current year, mainly on account of strong rise in investment demand in ETF products.

According to the report, platinum market reported a deficit of 550 koz in Q1 this year. The overall quarterly demand surged higher by 32% over the previous year to 2,560 koz. The investment demand totaled 765 koz, out of which ETF investments totaled 690koz. Bar and coin demand remained robust at 75 koz. Automotive demand declined by 5% to 765koz, whereas jewellery demand reported 5% decline year-on-year to total 560 koz.

The total platinum supply was up 15% in Q1 2019 at 2,010 koz. The quarterly mining supply witnessed a jump of 19% over the previous year to total 1,530 koz, primarily on account of increased supplies from South Africa. The recycling supply totaled 480 koz in Q1 this year, higher by 4% when matched with the same quarter a year before.

WPIC foresees a reduced surplus of 375 koz in 2019, significantly lower from the earlier surplus estimate of 680 koz. The total demand in 2019 is expected to rise by nearly 8% compared to 2018. The anticipated rise in ETF holdings in likely to lift the total investment demand in 2019 to 785 koz. The retail investment demand is likely to remain robust on account of new coin and bar launches by South African Mint and Royal Mint.

Meantime, platinum supply is forecast to increase by 4% in 2019, backed by increased supply from mining and recycling. Refined production is forecast to grow by 5% during the current year.