Demand for Platinum is expected to rise by 5% to a record 5.94 million ounces, according to the Platinum 2001 Interim Review, published by Johnson Matthey.
The demand is being led by a 25% rise in demand from the auto industry, the result of increased market share for diesel cars in Europe and substitution of platinum for palladium on gasoline engines. Growing use of platinum in specialty glass production, dental alloys, and petroleum refining is driving a 3% increase in industrial demand, the publication says.
Purchases by jewelry manufacturers, however, will fall by 11% due to recycling of surplus stocks and weak consumer demand-except in China, where fabrication of platinum jewelry continues to increase, according to the publication.
Supplies of platinum will increase by 5% to 5.58 million ounces, principally due to mine expansions in South Africa, the publication reports. The increase will only just keep pace with demand, leaving the market under-supplied by 360,000 ounces, similar to the deficit in 2000. Despite the strength of demand and limited market stocks, heavy short selling has depressed prices. As negative sentiment towards the world economy is likely to prevail for sometime, JM expects a platinum price range of $400 to $500 for the next six months.