LONDON, May 16 (Reuters) - A surplus in the platinum market
should shrink this year and the palladium and rhodium markets
are likely to move back into deficit, Johnson Matthey
said in a report on Monday.
The three metals are used in autocatalysts that reduce
emissions from vehicle engines, with platinum also used in other
industry and for jewellery and investment.
Tight supply of palladium and rhodium has driven prices to
record highs in recent years, while ample supply of platinum has
weighed on its price.
Johnson Matthey said it could not reliably estimate how much
metal would reach the market from Russia, a major producer, and
for that reason it did not give precise surplus or deficit
numbers as it has done in previous reports.
Sanctions on Russia since it sent troops into Ukraine in
February have not stopped its exports, but Johnson Matthey
researcher Rupen Raithatha said it was possible that governments
or companies may take further measures that could do so.
Matthey said low production of automobiles due to a
semiconductor shortage would dampen demand in 2022 but that
supply was also under pressure, with South African output
expected to fall.
Platinum demand growth is being driven by its increased use
in catalysts for heavy duty trucks and automakers saving money
by replacing some palladium with platinum in catalysts for
gasoline engines, Matthey said.
It said high prices of palladium and rhodium had caused
significant thrifting by Chinese automakers.
Increased supply risk from Russia, the biggest palladium
producer, was unlikely to speed up the substitution of palladium
in the short term but could in the longer term, Raithatha said.
Automakers "can't react that quickly on the amount of metal
they use this year or even next year, but if the situation (in
Ukraine) continues they may have some flexibility to substitute
a little bit quicker than they had previously planned," he said.
Following are numbers for 2022 and comparisons.
PLATINUM (THOUSANDS OF OUNCES)
2021 2022(f) % change
SUPPLY
South Africa 4611 4,204 -9%
Russia 638 0
North America 276 320 16%
Zimbabwe 465 498 7%
Others 207 200 -3%
TOTAL SUPPLY 6197 0
DEMAND
Automotive 2353 2,820 20%
Chemical 638 662 4%
Dental & biomedical 251 256 2%
Electrical & electronics 266 289 9%
Glass 913 475 -48%
Investment -28 -92 229%
Jewellery 1478 1,447 -2%
Petroleum 236 231 -2%
Pollution control 199 224 13%
Other 446 490 10%
TOTAL DEMAND 6752 6,802 1%
RECYCLING
Automotive -1235 -1,219 -1%
Electrical & electronics -44 -51 16%
Jewellery -380 -358 -6%
TOTAL RECYCLING -1659 -1,628 -2%
NET DEMAND 5093 5,174 2%
STOCKS CHANGE 1104 0
PALLADIUM (THOUSANDS OF OUNCES)
2021 2022(f) % change
SUPPLY
South Africa 2652 2,486 -6%
Russia 2689 0
North America 874 922 5%
Zimbabwe 392 412 5%
Others 187 187 0%
TOTAL SUPPLY 6794 0
DEMAND
Automotive 8340 8,411 1%
Chemical 589 614 4%
Dental & biomedical 210 191 -9%
Electrical & electronics 655 644 -2%
Investment 17 0 -100%
Jewellery 91 93 2%
Pollution control 96 109 14%
Other 99 84 -15%
TOTAL DEMAND 10097 10,146 0%
RECYCLING
Automotive -2891 -2,734 -5%
Electrical & electronics -463 -468 1%
Jewellery -9 -9 0%
TOTAL RECYCLING -3363 -3,211 -5%
NET DEMAND 6734 6,935 3%
STOCKS CHANGE 60 0 -100%
RHODIUM (THOUSANDS OF OUNCES)
2021 2022(f) % change
SUPPLY
South Africa 646 575 -11%
Russia 53 0
North America 17 21 24%
Zimbabwe 42 42 0%
Others 6 6 -11%
TOTAL SUPPLY 764 0
DEMAND
Automotive 946 962 2%
Chemical 52 65 25%
Electrical & electronics 7 5 -29%
Glass 16 35 119%
Other 11 15 36%
TOTAL DEMAND 1032 1,082 5%
RECYCLING
Auto -369 -351 -5%
TOTAL RECYCLING -369 -351 -5%
NET DEMAND 663 731 10%
STOCKS CHANGE 101 0
Source: Johnson Matthey
(Reporting by Peter Hobson; editing by Barbara Lewis)
When Digital Assets Are Increasingly at Risk, Look to Gold
We live in a digital world—one where seemingly every aspect of our lives is in some way controlled or affected by electronic networks. Communication, travel, entertainment, and finance are all areas in which we’re now forced to rely almost entirely on our smartphones,...
