A 'very different' platinum market swings into 600,000oz deficit

The platinum market is forecast to move into a deficit of 400,000 oz in 2012 from a surplus in 2011 according to the interim 2012 Johnson Matthey platinum report released today.

Severe disruption to platinum group metal mining following a series of wildcat strikes and violence on mines that started in August is expected to reduce supplies from South Africa by over 600,000 ounces says the research house.

South Africa constituted more than 70% of global supply of PGMs and the fall in production in the African nation will lead to a 10% decline in output to 5.84 million ounces this year.

Johnson Matthey forecast sales of platinum from South Africa will fall to an eleven-year low of 4.25 million ounces as a result of the labour unrest, safety stoppages and the closure of marginal operations. Output from other producing regions will remain  broadly flat overall.

With demand firm at 8.07 million ounces and a decline in recycling, "the balance of the platinum market will look very different to last year," say the authors of the report.

January platinum futures rose slightly on Friday to $1,613.50 an ounce after starting the year below the $1,400 an ounce level.