Global demand for platinum is set to increase by 5 per cent to 7,740 Kilo ounce ( koz) in 2019, the World Platinum Investment Council (WPIC) said in its latest research report.
The increase is due to the expected significant rise in investment demand, which offsets weaker forecast demand in automotive, jewellery and industrial segments.
Supply growth of 5 per cent exceeds demand growth resulting in the market balance rising from a surplus of 645 koz last year to 680 koz, the report said.
Total investment demand in 2019 is forecast to be 530 koz, as strong growth in ETF holdings reverses the net reduction in 2018 and adds another year of strong bar and coin demand. Despite a fall in ETF holdings towards the end of 2018, investors rapidly increased their ETF holdings in the first few weeks of 2019 across western markets and South Africa, the council said.
Chemical demand is estimated to rise by 35 koz in 2019, which will offset declines in the glass and other industrial segments. This will see overall industrial demand come close to the high level in 2018 at 1,885 koz.
The decline in jewellery demand should slow, dropping just 1 per cent to 2,325 koz, (2018 was 4 per cent below 2017) due to an easing of the decline in Chinese demand and growth in other regions, the report said.
Automotive demand is projected to fall at a far slower rate than in 2018, declining 3 per cent year-on-year to 3,000 koz in 2019, compared to a 7 per cent decline in 2018. The smaller decline is partly attributable to a stabilisation of demand in light-duty diesel autocatalysts in India.
Recycling platinum supply is expected to rise 3 per cent to 1,960 koz in 2019 due to an acceleration in European autocatalyst recycling, but with slower growth in the US, WPIC said.