logo

Newsfeed

Palladium, rhodium undersupplied as platinum swings to surplus -Johnson Matthey

PUBLISHED: Mon, 17 May 2021 11:00:00 GMT

By Peter Hobson LONDON, May 17 (Reuters) – The global palladium and rhodium markets will be undersupplied again in 2021 and the platinum market will move into surplus, specialist materials firm Johnson Matthey said in a report on Monday. The three sister metals are used chiefly by automakers, which embed them in engine exhaust systems to neutralise harmful emissions, though platinum is also used in other industries and for jewellery and investment. Deficits of palladium and rhodium are likely to support prices, which rallied to record highs this year. Demand and supply of the three metals were driven down last year by the coronavirus pandemic but are rebounding as governments ease restrictions and pump money into their economies. Johnson Matthey said the roughly 10-million ounce a year palladium market would be undersupplied by 829,000 ounces this year — its tenth consecutive annual shortfall — after deficits of 728,000 ounces in 2020 and 907,000 ounces in 2019. It forecast a shortfall of 31,000 ounces in the 1.1 million ounce rhodium market — the third in a row — after deficits of 72,000 ounces in 2020 and 63,000 ounces in 2019. It said the roughly 8-million ounce platinum market would be oversupplied by 615,000 ounces this year, returning to surplus after undersupply of 669,000 ounces in 2020 and 365,000 ounces in 2019. Pushing platinum into surplus will be a slump in purchases by investors from record levels above a million ounces a year in 2019 and 2020 to 311,000 ounces this year, Johnson Matthey said. Prices of all three metals rose in recent months thanks partly to problems at a processing plant run by Anglo American Platinum (Amplats) in South Africa and flooding at mines run by Nornickel in Russia, which limited supply. But these issues are now resolved and supply should become less tight, said Johnson Matthey researcher Rupen Raithatha. Following are numbers for 2021 and comparisons. PLATINUM (THOUSANDS OF OUNCES) 2019 2020 2021(f) 2020-21 %change Mine supply 6,023 4,944 6,096 23% Recycling 2,094 1,717 1,903 11% TOTAL SUPPLY 8,117 6,661 7,999 20% Auto 2,863 2,290 2,910 27% Chemical 666 640 634 -1% Electronics 232 241 280 16% Glass 441 451 514 14% Investment 1,131 1,022 311 -70% Jewellery 2,066 1,707 1,797 5% Medical 240 218 230 6% Petroleum 255 299 170 -43% Other 588 462 538 16% TOTAL DEMAND 8,482 7,330 7,384 1% SURPLUS/DEFICIT -365 -669 615 -192% PALLADIUM (THOUSANDS OF OUNCES) 2019 2020 2021(f) 2020-21 %change Mine supply 7,104 6,160 6,749 10% Recycling 3,407 3,119 3,569 14% TOTAL SUPPLY 10,511 9,279 10,318 11% Auto 9,667 8,551 9,447 10% Chemical 505 579 646 12% Dental 313 225 244 8% Electronics 714 626 656 5% Investment -87 -190 -93 -51% Jewellery 129 87 103 18% Other 177 129 144 12% TOTAL DEMAND 11,418 10,007 11,147 11% SURPLUS/DEFICIT -907 -728 -829 14% RHODIUM (THOUSANDS OF OUNCES) 2019 2020 2021(f) 2020-21 %change Mine supply 743 609 748 23% Recycling 357 338 378 12% TOTAL SUPPLY 1,100 947 1,126 19% DEMAND Auto 1,031 947 1,051 11% Chemical 59 55 72 31% Elec 6 7 7 0% Glass 46 5 19 280% Other 21 5 8 60% TOTAL DEMAND 1,163 1,019 1,157 14% SURPLUS/DEFICIT -63 -72 -31 -57% Source: Johnson Matthey (Reporting by Peter Hobson; Editing by Kirsten Donovan)

(c) Copyright Thomson Reuters 2021. Click For Restrictions – https://agency.reuters.com/en/copyright.html


Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.