JM predicts smaller platinum surplus, palladium and rhodium deficits



LONDON, May 16 (Reuters) - A surplus in the platinum market should shrink this year and the palladium and rhodium markets are likely to move back into deficit, Johnson Matthey JMAT.L said in a report on Monday.

The three metals are used in autocatalysts that reduce emissions from vehicle engines, with platinum also used in other industry and for jewellery and investment.

Tight supply of palladium and rhodium has driven prices to record highs in recent years, while ample supply of platinum has weighed on its price. XPD= RHOD-LON XPT=

Johnson Matthey said it could not reliably estimate how much metal would reach the market from Russia, a major producer, and for that reason it did not give precise surplus or deficit numbers as it has done in previous reports.

Sanctions on Russia since it sent troops into Ukraine in February have not stopped its exports, but Johnson Matthey researcher Rupen Raithatha said it was possible that governments or companies may take further measures that could do so.

Matthey said low production of automobiles due to a semiconductor shortage would dampen demand in 2022 but that supply was also under pressure, with South African output expected to fall.

Platinum demand growth is being driven by its increased use in catalysts for heavy duty trucks and automakers saving money by replacing some palladium with platinum in catalysts for gasoline engines, Matthey said.

It said high prices of palladium and rhodium had caused significant thrifting by Chinese automakers.

Increased supply risk from Russia, the biggest palladium producer, was unlikely to speed up the substitution of palladium in the short term but could in the longer term, Raithatha said.

Automakers "can't react that quickly on the amount of metal they use this year or even next year, but if the situation (in Ukraine) continues they may have some flexibility to substitute a little bit quicker than they had previously planned," he said.

Following are numbers for 2022 and comparisons.

PLATINUM (THOUSANDS OF OUNCES)

2021 2022(f) % change SUPPLY

South Africa

4611

4,204

-9% Russia

638

0

North America

276

320

16% Zimbabwe

465

498

7% Others

207

200

-3% TOTAL SUPPLY

6197

0

DEMAND

Automotive

2353

2,820

20% Chemical

638

662

4% Dental & biomedical

251

256

2% Electrical & electronics

266

289

9% Glass

913

475

-48% Investment

-28

-92

229% Jewellery

1478

1,447

-2% Petroleum

236

231

-2% Pollution control

199

224

13% Other

446

490

10% TOTAL DEMAND

6752

6,802

1%

RECYCLING

Automotive

-1235 -1,219

-1% Electrical & electronics

-44

-51

16% Jewellery

-380

-358

-6% TOTAL RECYCLING

-1659 -1,628

-2%

NET DEMAND

5093

5,174

2% STOCKS CHANGE

1104

0

PALLADIUM (THOUSANDS OF OUNCES)

2021 2022(f) % change SUPPLY

South Africa

2652

2,486

-6% Russia

2689

0

North America

874

922

5% Zimbabwe

392

412

5% Others

187

187

0% TOTAL SUPPLY

6794

0

DEMAND

Automotive

8340

8,411

1% Chemical

589

614

4% Dental & biomedical

210

191

-9% Electrical & electronics

655

644

-2% Investment

17

0

-100% Jewellery

91

93

2% Pollution control

96

109

14% Other

99

84

-15% TOTAL DEMAND

10097 10,146

0%

RECYCLING

Automotive

-2891 -2,734

-5% Electrical & electronics

-463

-468

1% Jewellery

-9

-9

0% TOTAL RECYCLING

-3363 -3,211

-5%

NET DEMAND

6734

6,935

3% STOCKS CHANGE

60

0

-100%

RHODIUM (THOUSANDS OF OUNCES)

2021 2022(f) % change SUPPLY

South Africa

646

575

-11% Russia

53

0

North America

17

21

24% Zimbabwe

42

42

0% Others

6

6

-11% TOTAL SUPPLY

764

0

DEMAND

Automotive

946

962

2% Chemical

52

65

25% Electrical & electronics

7

5

-29% Glass

16

35

119% Other

11

15

36% TOTAL DEMAND

1032

1,082

5%

RECYCLING

Auto

-369

-351

-5% TOTAL RECYCLING

-369

-351

-5%

NET DEMAND

663

731

10% STOCKS CHANGE

101

0

Source: Johnson Matthey



Platinum balance Link



Reporting by Peter Hobson; editing by Barbara Lewis

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