Pgm Market Report: February 2019

Key highlights

 

Platinum outlook for 2019:

• The platinum market will remain in surplus in 2019, despite positive demand trends in automotive and industrial applications.
• The outlook for automotive platinum use is improving, due to stricter vehicle testing procedures in Europe and tighter emissions limits for heavy duty vehicles in China.
• Industrial consumption of platinum will be supported by the ongoing construction of several large integrated petrochemical complexes in China.
• The prospects for Chinese platinum jewellery demand are negative, due to increased competition from karat gold products, and increased recycling of old platinum jewellery.
• Supplies from South Africa will be supported by the refining of in-process stocks, helping to offset shaft closures.

 

Palladium outlook for 2019:

• Strong growth in autocatalyst demand will drive the palladium market further into deficit in 2019.
• Stricter emissions legislation and more stringent vehicle test procedures are forecast to stimulate double digit rises in palladium demand from European and Chinese automakers.
• Industrial demand will remain firm, with continuing strong demand from the Chinese chemical sector.
• Recycling is forecast to rise again, but there is little prospect of growth in primary supplies.
• Remaining Exchange Traded Fund (ETF) holdings are no longer sufficient to bridge the gap between industrial demand and supplies.

 

Rhodium outlook for 2019:

• Rhodium use in autocatalysts is set to grow strongly in 2019, as car companies increase catalyst loadings in response to tighter legislation and more stringent in use testing.
• This should outweigh thrifting in the glass industry, which is expected to reduce the rhodium content of some platinum glass making alloys.
• Primary supplies are expected to be flat, as South African producers refine excess pipeline inventory, while there should be further growth in recycling.
• The market could remain in a technical surplus, but any improvements in availability are likely to be absorbed by rising automotive demand and, potentially, strategic purchasing.