Very positive long-term outlook for platinum – Hinkly

CAPE TOWN (miningweekly.com) – The outlook for platinum demand in the next five years is very positive, Anglo American Platinum executive head marketing Andrew Hinkly said on Monday.

Speaking at the 2016 Investing in African Mining Indaba, Hinkly said that the continued requirement for clean vehicle emissions would continue to drive demand for platinum, particularly in India.

The platinum jewellery market in India also held particular promise, while the launch of the Mirai fuel-cell car by Toyota was a likely inflection point for platinum-using hydrogen fuel cell demand.

There was also increased used of stationary fuel cells and energy storage opportunities in helping to stabilise national electricity grids.

“We also believe that in five years’ time the market will be there,” Ivanplats VP Gerick Mouton said.

SFA Oxford head Stephen Forrest, who was moderating the main-stage panel discussion on platinum-group metals, forecast that the platinum market would be tougher for the next three years before becoming attractive.

Forrest said that asset impairments by platinum mining companies were a sign of the market moving into a near-term surplus.

The low platinum price was indicating a need for a cutback in supply as the market moved into surplus.

To break even, a platinum price of $960/oz was needed, suggesting that a structural adjustment was needed.

But looking ahead to 2018, demand growth was expected to return, with autocatalyst demand growth dominating demand three years on.

There were indications of strong recovery of demand from the automotive sector, particularly in emerging markets, where China was introducing Euro 4, 5 and 6 emission regulations and India considering leapfrogging from Euro 4 to Euro 6.

Platinum equities would go up during 2016 as money floated back into South Africa from investors seeing opportunity.

Northam Platinum CEO Paul Dunne said that over a period of 30 years platinum had been an excellent investment and that its investment attraction would return.

Projects took long to reach the production stage and bringing on new supply took time.

World Platinum Investment Council CEO Paul Wilson said the platinum market had been in deficit and that there were not high surpluses.

He forecast more years of deficit in the future.