The platinum market remained in deficit for the fifth consecutive
year, but with a narrowing gap between supply and demand.
Platinum supply in 2003 grew by 270,000 ounces to 6.24 million
ounces – reflecting PGM expansions in South Africa and
Zimbabwe, as well as higher Russian shipments. This is in
contrast to the much slower rise in demand (edging up by only
50,000 ounces, or less than 1%) to 6.52 million ounces. The
outlook for 2004 is that the market should reach equilibrium,
or may even reflect a slight surplus.
The most dramatic growth in platinum consumption came from
the autocatalyst sector, which surged by 600,000 ounces to
3.19 million ounces. Having run down their stocks in 2002,
US auto companies returned to the market for their metal requirements,
while diesel car sales in Europe increased by more than 5%
to exceed 6 million units, as their market share rose to 43%.
In Japan, autocatalyst demand grew by 19% to 510,000 ounces,
reflecting the new heavy-duty diesel emissions legislation
in the Tokyo metropolitan area. Output of Chinese manufactured
cars surged to over 2 million units, up 67% from 1.2 million
in 2002. New car sales soared to 72% in China, while in India
car sales grew rapidly to 700,000 units. The continuing tightening
emissions legislation in these two countries contributed to
growth of 21% in platinum demand for autocatalysts in the
area known as the rest of the world.
Demand from the jewellery industry, on the other hand, declined
as anticipated as a result of the record prices achieved for
the metal, spiking at $937 in April. In China, platinum jewellery
purchases fell by 19% to 1.2 million ounces, the first fall
since the beginning of the development of that market in the
1990s. Japan also manifested a drop in consumption to 665,000
ounces (about half the level of demand of four years ago),
reflecting the contraction of the Japanese jewellery market
as a whole. Manufacturers purchased less platinum owing to
a further rise in the volume of recycled stock. The liquidation
of bankrupt companies also contributed significantly to the
amount of metal on the market.
