Platinum output from Zimbabwe is expected to drop three percent to 465 000 ounces due to economic headwinds but mine production from the region in general is expected to remain stable, according to the World Platinum Investment Council (WPIC).
Zimbabwe has the second largest known platinum reserves after South Africa and is currently pushing for the processing of the white metal to boost export receipts.
According its third quarter 2018 report, WPIC said global refined production is forecast to fall one percent year on year to 6,080 ounces in 2018. South African supply is predicted to increase marginally (+15 000 ounces ), with ramp-up of new production areas and recovery of output from a mine impacted by a tailings dam failure last year offsetting production lost from shaft closures.
Platinum supply from Russia is projected to fall five percent (-35 000 ounces) to 685 000 ounces owing to a small pipeline lockup.
“Output from Zimbabwe could drop by three percent (-15 000 ounces) to 465 000 ounces because of a pipeline boost to yield in 2017, but mine production from the region should remain stable overall,” the report reads.
“North American production is forecast to remain unchanged at 365 000 ounces for the year, while a minor reduction (-10 000 ounces) is anticipated from the rest of the world. There was a net 25 000 ounces reduction in producer inventories for the first nine months of 2018, and a restock of around 40 000 ounces is estimated for the final quarter. This gives total mining supply of 6,065 000 ounces for 2018, down one percent (-90 000 ounces) on 2017 levels.”
Total global platinum supply, according to the report is forecast to dip one percent year on year (-70 000 ounces) to 7,975 000 ounces in 2018 as total mining supply drops one percent (-90 000 ounces) to 6,065 000 ounces, while recycling grows marginally (+20 000 ounces) to 1 910 ounces.
Refined production was up four percent (+70 000 ounces) year on year to 1 650 ounces in the third quarter of 2018 due to increased supply from South Africa and Zimbabwe.
South African refined production is expected to increase slightly (+15 000 ounces) while North American output is flat, but declines are likely in Zimbabwe (-15 000 ounces), Russia (-35 000 ounces) and other regions (-10 000 ounces).
In addition, a 15 000 ounces build in producer inventory is anticipated. Secondary platinum supply is forecast to climb one percent (+20 000 ounces) as continued growth in auto-catalyst recycling (+80 000 ounces) is mostly offset by a decline in recycled jewellery (-60 000 ounces).
Global platinum demand is projected to drop four percent to 7 470 ounces this year as reductions in automotive (-225 000 ounces), jewellery (-55 0000 ounces) and investment (-140 000 ounces) demand are only partially offset by an increase in industrial usage (+130 000 ounces).
The amount of platinum used in the automotive market is expected to fall seven percent to 3 110 ounces.
“Automotive demand continues to suffer from the decline in the diesel share of passenger cars in the Western European market, which significantly outweighs gains from the heavy-duty diesel market. Jewellery consumption is growing in most regions, but the ongoing decline in China, which is the largest market, is expected to result in a two percent drop in global jewellery demand to 2,405 ounces,” said WPIC.