September 6, 2018 / 5:00 AM / 19 days ago

Platinum market set for second consecutive surplus in 2018 - WPIC

    * Oversupply seen at 295,000 ounces in 2018
    * Supply and demand both to shrink by 2 pct

    By Peter Hobson
    LONDON, Sept 6 (Reuters) - The global platinum market will
be oversupplied by 295,000 ounces this year as both supply and
demand of the autocatalyst metal fall by 2 percent, the World
Platinum Investment Council (WPIC) said on Thursday. 
    Lower production of diesel vehicles in Europe will cut
platinum use by auto makers by 6 percent, outweighing an
increase in consumption by industry, the WPIC said in its latest
Platinum Quarterly report.
    Vehicle manufacturers use both platinum and palladium in
emissions-cutting catalytic converters, but diesel engines use
more platinum, and sales of these have fallen since Volkswagen
 was found in 2015 to have cheated emissions tests. 
    Supply will also fall due to lower output at mines in key
producers South Africa, Zimbabwe and Russia, resulting in a
second consecutive global surplus, said the WPIC, which is
funded by platinum producers.
    The second quarter was marked by a sharp fall in investment
demand for platinum, as tumbling prices sapped interest in
exchange traded funds backed by the metal.
    But this has already begun to reverse and investment demand
is expected to end the year only slightly lower, WPIC director
of research Trevor Raymond said. 
    Platinum prices touched their lowest since 2008 in
August after falling steadily from January, in part due to
concerns of oversupply.
    
    
  PLATINUM SUPPLY/DEMAND ('000 oz)*     
                    Q2 2018  Q1 2018  Q2 2017  2018 (f)  2017
 Mine supply        1,640    1,295    1,630    6,015     6,170
 Recycling          480      455      480      1,895     1,890
 TOTAL SUPPLY       2,120    1,750    2,110    7,910     8,060
                                                         
 Automotive demand  800      805      840      3,130     3,340
 Jewellery demand   590      605      590      2,445     2,460
 Industrial demand  445      465      415      1,790     1,700
 Investment         -55      50       100      250       265
 TOTAL DEMAND       1,780    1,925    1,945    7,615     7,765
                                                         
 Balance            340      -175     165      295       295
 Above-ground                                  2,495     2,200
   stocks                                                
  * Source: World Platinum Investment Council, Platinum
Quarterly Q2 2018
    

 (Reporting by Peter Hobson; Editing by Kirsten Donovan)
  
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