Supply demand fundamentals gradually tightening for Platinum group metals
Joannesburg-S.A. (Apr 23) HSBC looks for platinum group metals to rise on gradually tightening fundamentals. The bank pointed out that top South African producer Anglo American reported higher primary production in the first quarter but lower refined output, with the latter materially impacted by a planned stock take at the Precious Metal Refinery and safety stoppages that closed the refinery for 12 days.
“Consequently, refined platinum production decreased by 52% to 261,000 ounces, with similar decreases for palladium and rhodium,” HSBC said, describing this as supportive for the metals since it shows limited upside for output.
Meanwhile, imports by the world’s largest PGM consumer, China, were strong in the first quarter, HSBC continued. March palladium imports were down by 21% year-on-year in March, but were up by 61% for the entire first quarter, HSBC pointed out.
Platinum imports were up 11% for the quarter. “We attribute strong palladium imports to good auto demand, which absorbs the bulk of palladium sent to China,” HSBC said, citing a jump in Chinese vehicle production late last year.
Meanwhile, low platinum prices appear to have stimulated greater purchases of this metal for jewelry, HSBC added.