THIS WEEK IN PLATINUM
Number 486, November 19, 1999
Johnson Matthey Expects 530,000 Ounce Platinum Supply Deficit in 1999
Johnson Matthey released their 1999 Interim Review with estimates of 4% platinum demand growth for 1999, coupled with a platinum supply shortfall to the tune of 530,000 ounces, or a little under 10% of overall demand. If Russian shipments do indeed fail to materialize this year, the supply shortfall should be even higher. Under the assumption that supplies are forthcoming from Russia before the end of this year, Johnson Matthey forecasts a platinum price range from $370 to $440 for the next six months.
Other highlights from JM's Interim Review:
ú Total world supply of platinum is down by 6% in 1999.
ú Demand for platinum has increased by 200,000 ounces to a new high of 5.59 million ounces.
ú Platinum jewelry demand is expected to reach a new record level of 2.73 million ounces.
ú Japanese jewelry demand is expected to increase, reversing the declining trend of the past two years.
ú Overall Japanese platinum demand is forecast to increase by 0.5% in 1999.
South African precious metals equity analyst Rene Hochreiter, of Barnard Jacobs Mellet, had forecast earlier this week a similar projection to Johnson Matthey's, saying the supply deficit for 1999 could be as high as 530,000 ounces, owing to a dropoff of Russian supply of about 400,000 ounces and other producers offering about 50,000 ounces less to market than had been originally expected. Mr. Hochreiter made his forecasts with the caveat that there remains the chance that a surprise shipment of Russian platinum may emerge before year's end, though the likelihood of that was considered low, prior to news regarding Duma action (below).
Reuters reports that the Duma passed an amendment to alleviate the effects of "Clause 19" which had inadvertently barred the exports of platinum from Russia so far in 1999. The passage raises the hopes that perhaps shipments may occur this year, a thing that has been increasingly in doubt. For it to mean that platinum exports can resume, however, President Boris Yeltsin may have to specifically name the "exporter organization" authorized to ship platinum. If President Yeltsin fails to sign the amendment into law, this may be sufficient cause for exports to be further stymied, according to the report. Yeltsin is currently in Turkey, fending off Western criticism of Russia's military action in Chechnya.
Interfax reported Friday that Russia's central bank is still waiting for its palladium export quota for 2000, quoting an undisclosed senior official at the bank. The official said he had "no idea" when President Boris Yeltsin will sign an order allowing the central bank to export palladium next year. Norilsk had been granted a 10-year palladium export quota last spring, with the amount of palladium to be permitted for exports left undisclosed. |
