World platinum supplies in surplus

Demand for platinum in 1993 increased 6% to 4 million oz. as automobile and jewelry usage rose to record levels.

However, metals dealer Johnson Matthey says supplies of the metal reached a new peak of 4.4 million oz., up 15% from the previous year. Consequently, demand was exceeded by 340,000 oz., the firm says in its latest market study, Platinum 1994.

The price in 1993 averaged US$374 per oz., up $14 from the previous year. Western demand last year was dominated by two sectors, jewelry (accounting for 40% of demand) and autocatalysts (35%).

South African sales surged by 610,000 oz. to 3.4 million oz., fuelled by mine expansions by JCI and Lonhro and by new production at Northam. The country supplied 77% of the world’s platinum in 1993.

Meanwhile, Russian shipments were off by 70,000 oz., to 680,000 oz. For 1994, Johnson Matthey projects a 150,000-oz. rise in the use of platinum in autocatalysts, in response to strong growth in U.S car production. A small increase in demand for platinum jewelry is also expected.

In South Africa, Johnson Matthey foresees a slowing in the growth of platinum supplies. Although mines there have cut costs and improved efficiency, financial pressures may cause the closure of unprofitable operations, it says. Among other platinum group metals, the palladium market experienced a deficit of 125,000 oz. last year, despite a 4.1-million-oz. increase in supplies. Consumption reached 4.3 million oz. as auto and electrical demand increased. Russia accounted for 56% of world palladium sales in 1993.

The rhodium market was in surplus — demand of 360,000 oz. was easily met by supplies of 375,000 oz. — and the price of the metal fell below US$1,000 per oz.