Zim, Russia weigh down refined platinum output

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TINASHE MAKICHI

Global refined platinum production fell three percent year-on-year to 1 535 ounces following a decline in Russian output caused by a build-up of material in the processing pipeline and lower output in Zimbabwe as production returned to a steady state, according to the World Platinum Investment Council (WPIC) fourth quarter report.

The period saw refined platinum supply from Zimbabwe falling 14 percent to 120 000 ounces compared to the prior year period which recorded an increase boosted by processing of work in progress material, according to the World Platinum Investment Council fourth quarter report.

“Refined platinum production fell three percent year-on-year (-55 00 ounces) in the fourth quarter 2018 to 1 535 ounces following a decline in Russian output (-45 000 ounces) caused by a build-up of material in the processing pipeline, and lower output in Zimbabwe (-20 000 ounces) as production returned to a steady state.

“South African production was 10 000 ounces higher, year-on-year, while North American production edged up 5 000 ounces,” said WPIC.

Output from North America grew five percent year-on-year to 100 000 ounces with an expansion project in ramp-up phase in the United States of America.

Russian supply during the period dropped 24 percent year-on-year with a build-up of work in progress material at the precious metals refinery during the quarter.

Production from other regions remained stable at 45 000 ounces.

There was a net 5 000 ounces increase in producer inventory during the quarter, and total mining supply therefore fell by five percent year-on-year to 1 530 ounces. Lower ore grades and crusher maintenance work adversely affected production on the Northern Bushveld, while challenging ground conditions and safety issues reduced output from the Western Bushveld.

Total platinum supply for the fourth quarter 2018 fell marginally to 8 010 ounces in 2018 owing to lower mining supply, as recycled platinum increased modestly.

Refined production slipped one percent to 6 085 ounces following lower output from Zimbabwe (-10 000 ounces), Russia (-45 000 ounces), and North America (-5 000 ounces), while production was marginally higher in South Africa (+10 000 ounces).

Secondary supply rose by 20 00 ounces to 1 910 ounces as a seven percent increase in auto catalyst recycling (+95 000 ounces) was mostly offset by a 13 percent decline in jewellery recycling (-75 000 ounces) owing to the weaker price environment.

On demand, global platinum demand dropped five percent last year to 7 365 ounces, as declines in automotive, jewellery and investment demand outweighed improved industrial demand.

Automotive demand fell seven percent to 3 100 ounces owing to the ongoing contraction in the Western European diesel market. Jewellery consumption was down four percent to 2 355 ounces as Chinese jewellery demand continued to fall and this outweighed gain in other regions.

Overall investment demand was very weak in 2018 at 15 000 ounces, as net sales from platinum ETFs mostly offset increased purchases of bars and coins.

Industrial usage advanced by 11 percent to 1 895 ounces as net petroleum demand recovered from a weak 2017 and more new capacity installations boosted glass demand. In 2018, platinum demand contracted more than supply, resulting in a market surplus of 645 000 ounces.