Platinum market posts 'deep deficit' in 2014, stocks act as buffer: GFMS
London (May 14) The platinum market in 2014 recorded a deep deficit -- before inventory movements -- of 1.02 million oz, singularly owing to major strike-related production stoppages in South Africa, the GFMS Platinum & Palladium Survey 2015 said Thursday.
"This situation was lessened though by stock movements and prior allocation of inventory; both the miners and consumers entered the strike well positioned to handle lower refinery out-turn," the report said.
The deficit in 2014 follows seven years of market surplus out of the past eight and is expected to be sustained, albeit at lower levels, in 2015.
The analytics company forecasts an average 2015 platinum price of $1,170/oz, down 16% on the year -- only 3% higher than current spot prices.
"Palladium, on the other hand has been a market in deficit since 2007. The GFMS team estimate the palladium market deficit last year at 1.58 million oz, representing the most severe market imbalance for more than a decade." GFMS, in conjunction with Thomson Reuters, is forecasting an average palladium price of $800/oz, modestly above current spot prices, and flat on year.
The London Bullion Market Association Platinum Price settled Thursday morning at $1,149/oz with the LBMA Palladium Price at $783/oz.
As a sign of current market conditions, South African platinum producer Lonmin is to cut 3,500 jobs in a bid to counter the persistently low platinum price, the miner said May 7.