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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