Demand for platinum in 2000, at 5.6 million oz., was marginally up on the record level achieved in 1999, but the pattern of consumption was significantly different from that of recent years.
Sales to the auto industry rose after declining in each of the previous three years, whereas industrial demand grew once again. However, jewelry demand fell for the first time in 17 years, and net investment was negative, with significant numbers of large bars being sold back to the market by Japanese investors.
The largest growth sector was the auto industry, where demand increased by 250,000 oz. to reach 1.8 million oz. In the European car market, the share taken by diesel engines rose to almost one-third, and this, coupled with the imposition of Euro Stage III emissions regulations, boosted platinum use. In North America, the lion’s share of the demand came from stock building by auto companies that expect to use the metal as a replacement for palladium.
Industrial demand rose by 110,000 oz., to 1.4 million oz., with more and more of the metal being used in computer hard disks and in the production of specialty glass, especially for liquid crystal displays.
In Japan in recent years, increased recycling of old jewelry contributed to a 20% fall in Japanese demand for platinum. As a result, Japan was overtaken by China as the largest market for platinum jewelry.
Also, investment demand was weak, with sales of coins and investment bars halving to 40,000 oz. and resulting in a net sell-back of 100,000 oz. of large bars in Japan.
In 2000, supplies of platinum rose by 420,000 oz. to 5.3 million oz. and would have been significantly higher if South African mines had reached their production targets. The combination of bad weather in the first quarter and a strike at Anglo Platinum later in the year reduced South African supplies by 100,000 oz., compared with 1999. However, the shortfall was offset by higher shipments from Russia, which more than doubled to 1.1 million oz.
— The preceding is an excerpt from Platinum 2001, published by London-based Johnson Matthey.
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