The platinum market was in deficit of 480,000 oz in 2007, according to the Platinum 2008 report released today by Johnson Matthey.

Global supplies reached 6.55 million ounces while demand for the precious metal increased by 8.6 per cent to 7.03 million ounces.

Disruption in South Africa drove demand down while platinum's increased use in autocatalysts and industry remained strong as demand for jewellery fell marginally under pressure from a 35 per cent increase in price.


The unscheduled closure of mining operations, safety problems and difficult industrial relations impacted on the South African supply of platinum which fell by 4.9 per cent to 5.04 million ounces.

But autocatalysts enjoyed increasing sales with the sector purchasing 8.2 per cent more platinum in 2007.

Diesel vehicles fitted with the platinum-based exhausts continued to increase and although palladium is being used ahead of platinum in some catalytic converters, the demand remained strong.

The jewellery market remained resilient despite tough conditions and purchases fell marginally to 1.59 million ounces with manufacturing of the jewellery in China rising from 760,000 oz to 780,000 oz.

But Johnson Matthey expects platinum prices to remain volatile as a result of the power-supply crisis in South Africa and the temporary closure of the Amandelbult mine due to flooding.

"With industrial and automotive demand expected to remain strong and supplies set to underperform, the platinum market is likely to be in a substantial deficit in 2008," the report said.

Source: JM PR