Platinum demand rising but surplus to remain

World demand for platinum will rise by 7% this year to a new peak of 4.3 million oz., but it will not be sufficient to overcome the supply.

The prediction was made by metals dealer Johnson Matthey, which attributes the increase to record consumption by the jewelry and auto industries. Supply of the precious metal is expected to total 4.4 million oz., virtually unchanged from 1993.

During the first nine months of 1994, platinum averaged US$402 per oz. On the demand side, vigorous growth in North American auto production and a modest increase in Western Europe are resulting in a rise in the use of platinum in autocatalysts. The Japanese market continues to be “hot” for jewelry made of platinum.

On the supply side, a 4% shortfall by South Africa will be offset this year by an 18% increase in Russian sales.

Demand for palladium is projected to rise by 12% to 4.7 million oz. this year; increased consumption is noted for the electronics and auto industries. Russian sales will boost total supplies to 4.9 million oz.

Rhodium, used in the manufacture of autocatalysts, is benefiting from higher car production and tighter limits on emissions. Demand this year is expected to rise by 4% to 376,000 oz. Supply of the precious metal is expected to grow to 402,000 oz.