Metals Page: Platinum demand to outstrip supply to ’93

Looking into the future, Johnson Matthey, the large refiner and supplier of platinum group metals, says demand for platinum will continue to put pressure on the supply of newly-mined metal during the next five years, as it has since 1984.

The company foresees demand for the metal growing by about 540,000 oz, or 16%, over the next five years, to 3.86 million oz. Last year marked the first time demand for the metal, at 3.32 million oz, topped the 3-million-oz mark, Johnson Matthey says.

Supply of new metal, the company predicts, will increase only gradually over the same period to 3.85 million oz, creating a delicate state of supply-demand equilibrium by 1993.

For 1988, supplies of newly mined platinum are expected to fall short of demand by about 450,000 oz. Imbalance

Demand for platinum from all sectors in Japan, sustained offtake by the United States and Japanese car industries, and signs new platinum bullion coins are already utilizing large quantities of platinum, are factors producing a taut supply- demand imbalance in 1988, Johnson Matthey says.

The price for platinum has been anything but steady this year, peaking at $628(US) per oz at the first of June but also sinking to as low as $452. At press time, the price of the metal was in the $510 range.

Producers from new mines in South Africa, the company says, may be in a position to add 750,000 oz platinum to the market by 1993, with over-all supplies only just keeping pace with demand by that time.

Future production of the metal from Canada and Australia is expected to be relatively modest; no exploration venture in either nation yet compares with South Africa’s Bushveld complex. And, at the Stillwater project in Montana in the U.S., where more palladium than platinum is found in the mineralization, no significant addition to world platinum supplies is expected in the near future.

During the next five years, Johnson Matthey expects a 31% increase in demand for platinum in autocatalysts (automobile sector), a 21% rise in jewelry demand, and an 81% jump in investment demand for platinum investment products weighing 10 oz or less.

The chemical, glass and electrical industries will also exhibit stable demand for the metal, but demand for platinum in the petroleum industry will decline by 18%.

Secondary supply from autocatalyst recovery and secondary refining should not have a great effect on the over-all supply- demand balance, Johnson Matthey says. At the present time, the company views this secondary platinum as a continuing surety of supply should there be a threat of disruption to the flow of metal from the prime producing countries.

Meanwhile, Johnson Matthey has announced its first minting in the U.S. of a platinum medallion, the one-ounce 0.9995 pure Platinum Dragon, in commemoration of the Chinese “year of the dragon.”

Tightness of supply in the next few years is foreseen for germanium, reports Roskill of London in a new study.

Consumer demand for the metal is unlikely to be greatly in excess of supply during the next few years, the minerals marketing information firm writes. World reserves are adequate and existing refinery capacity can meet the expected growth in demand.

Competition between refiners for the available germanium-bearing raw materials is, however, expected to increase, and will exert upward pressure on prices, not only for residues and concentrates, but also probably on those for dioxide and metal.

Germanium is recovered largely as a minor byproduct of zinc or other metal mining but supplies, Roskill says, are to some extent affected by the willingness of metal producers to recover germanium. The major factors in the competition for residues and concentrates are, however, the general lack of vertical integration in the germanium industry, the small tonnages of material involved and the relatively small number of producers and refiners.

World consumption of germanium was estimated to be 110-130 tonnes in 1987; demand is expected to grow until 1990. Among the uses to which germanium is put are as a component in infra-red imaging systems (mainly military), in optical fibres (tetrachloride) and in radiation detectors.