First new market forecasts for Platinum and Palladium – Commerzbank

A market-leading refiner of Platinum group metals headquartered in London yesterday published its new forecasts for the supply and demand of Platinum group metals, Commerzbank's commodity analyst Carsten Fritsch notes.

Platinum faces third straight year of major supply deficit

"According to the forecast, the Platinum market is expected to show another considerable supply deficit of 736 thousand ounces this year. This would be the third consecutive significant supply deficit. Demand is expected to fall by 2.6% because the automotive industry is likely to require less Platinum and investment demand is also expected to decline. Supply is expected to fall by 1.3%. The main reason for this is a 5% drop in mine production in South Africa. This will prevent a smaller supply deficit."

"The company expects the Palladium market to be almost balanced this year, following a supply deficit of 501 thousand ounces in the previous year. The reason for the vanishing supply deficit is a 6.4% decline in demand. Similar to Platinum, this is due to lower Palladium demand from the automotive industry and weaker investment demand. The latter is expected to be negative for the first time in three years, which can be explained by expected ETF outflows. Palladium supply, on the other hand, is only expected to fall by 1.7%."

"This is mainly due to a decline in mine production in South Africa and North America. In contrast, the recycling supply from the automotive industry is expected to increase. Other market observers such as the World Platinum Investment Council and Metals Focus, a research company specialising in precious metals, are expected to publish their new forecasts on Monday."