platinum 2005 · • palladium demand climbed as substitution of platinum increased, emissions...
TRANSCRIPT
Platinum Platinum 20052005
16th May 200516th May 2005
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Platinum Demand + 1%Platinum Demand + 1%
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2003 2004
Demand
million oz
• Demand edged up to a new high of 6.58 million oz
• Strong growth from autocatalyst sector and industrial applications
• Purchases for jewellery manufacture dropped by 12 per cent
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Platinum Supply + 5%Platinum Supply + 5%
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2003 2004
Demand Supply
million oz
• Supplies grew more rapidly than demand, reaching 6.5 million oz
• Market moved close to balance
• Price was supported by fund investment, as well as by physical demand
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Platinum Demand by Application Platinum Demand by Application Autocatalyst: +7%Autocatalyst: +7%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004
'000 oz
RoW
N.America
Japan
Europe
3,2703,510
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250
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750
1,000
1,250
1,500
1,750
1999 2000 2001 2002 2003 2004
'000 oz
20
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55
%
Pt in Gasoline Pt in Diesel LDD market share
European Demand for Platinum in European Demand for Platinum in Autocatalysts 1999Autocatalysts 1999--20042004
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Autocatalyst Demand for Platinum: Autocatalyst Demand for Platinum: Other MarketsOther Markets
North America: down 10% to 800,000 oz• Substitution by palladium in gasoline autocatalysts
Japan: up 18% to 590,000 oz• Truck manufacturers introduce models with
catalysts & particulate filters as standard equipment
Rest of the World: up 7% to 460,000 oz• Higher light vehicle production and tightening
emissions limits in Asia
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Platinum Demand by Application Platinum Demand by Application Jewellery: Jewellery: --12%12%
0
400
800
1,200
1,600
2,000
2,400
2,800
2003 2004
'000 oz
RoW
Europe
N.America
Japan
China
2,510
2,200
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Fall in Chinese Jewellery DemandFall in Chinese Jewellery Demanddown 19% to 1.01 million ozdown 19% to 1.01 million oz
• Increased competition from white gold and palladium in provincial cities
• Many manufacturers began production of more profitable palladium jewellery
• Inventories of platinum jewellery reduced throughout the trade
• Rising platinum price affected manufacturers’profit margins and metal financing costs
• But size of market previously underestimated, diamond-set and bridal sectors developing
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Fall in Chinese Jewellery DemandFall in Chinese Jewellery Demand
160
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280
300
A J A O D F A J A O D F A
RMB pergram
Retail Price, Shanghai
Average Pt Price
2003 2004 2005
}Manufact.
Wholesaler
Retailer
5% tax
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Jewellery Demand for Platinum:Jewellery Demand for Platinum:Other MarketsOther Markets
North America: down 9% to 290,000 oz• High platinum price pressures sales at
lower end of US market
Japan: down 12% to 560,000 oz• Strong competition from white gold
• Inventory recycling persists at high rates
Europe: up 8% to 205,000 oz• Further growth in UK market plus
strong sales of Swiss watches
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Platinum Demand by ApplicationPlatinum Demand by ApplicationIndustrial: +11%Industrial: +11%
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200
400
600
800
1,000
1,200
1,400
1,600
2003 2004
'000 oz
Petroleum
Glass
Electrical
Chemical
Other
1,380
1,530
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Platinum Demand by ApplicationPlatinum Demand by Application
(12)2,2002,510 Jewellery
% change% change2004200420032003’000 oz
73,5103,270 Autocatalyst: gross
9(700)(645) recovery
111,5301,380 Industrial
4015 Investment
16,5806,530TOTAL DEMAND
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Platinum Supply by RegionPlatinum Supply by RegionTotal supply: +5%Total supply: +5%
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2003 2004
millionoz
Other
N. America
Russia
South Africa
6.306.50
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Platinum Supply by RegionPlatinum Supply by Region
South Africa: up 9% to 5.03 million oz• Output exceeds expectations; higher
production from most major producers
• Rand strength & other cost pressures cause further revisions to expansion plans
Russia: down 19% to 850,000 oz• Sales drop back to reflect mine production
North America: up 31% to 385,000 oz• Strong recovery in output at Inco
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Platinum Supply and DemandPlatinum Supply and Demand
(80)(330)Movements in stocks
+56,5006,200Supply
+16,5806,530Demand
%%2004200420032003’000 oz
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Platinum price price vsvs NYMEX net NYMEX net speculative positionspeculative position
January 2004 – April 2005
750
775
800
825
850
875
900
925
950
J F M A M J J A S O N D J F M A
$ per oz
-50
0
50
100
150
200
250
300
350'000 oz
Total Net Spec. Weekly Average Price
2004 2005
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Palladium Demand + 22%Palladium Demand + 22%
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2003 2004Demand
million oz
•• Demand jumps to Demand jumps to 6.6 million oz 6.6 million oz
•• Autocatalyst & electronics Autocatalyst & electronics purchases improve purchases improve
•• Production of palladium Production of palladium jewellery in China jewellery in China develops rapidlydevelops rapidly
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Palladium Supply + 18%Palladium Supply + 18%
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2003 2004Demand Supply
million oz
•• Supplies surge to Supplies surge to 7.62 million oz 7.62 million oz
•• Large sales from Russian Large sales from Russian stocks; increased mine stocks; increased mine production elsewhere production elsewhere
•• Market remained heavily in Market remained heavily in surplus, price weakness surplus, price weakness persistedpersisted
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Palladium Demand by Application Palladium Demand by Application Autocatalyst: +10%Autocatalyst: +10%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004
'000 oz
RoW
N.America
Japan
Europe
3,4503,810
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Autocatalyst Demand for Palladium Autocatalyst Demand for Palladium
Japan: up 23% to 675,000 oz• Palladium demand climbed as substitution of
platinum increased, emissions limits tightening
North America: up 20% to 1.445 million oz• US automakers increased purchases, having run down
inventories the previous year
Europe: down 5% to 1.16 million oz• Palladium demand fell for the fourth year as
gasoline vehicle sales continued to slide
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Palladium Demand by Application Palladium Demand by Application Industrial, Jewellery & Other: +39%Industrial, Jewellery & Other: +39%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004
'000 ozOther
Jewellery
Dental
Electronics
3,320
2,380
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Jewellery Demand for PalladiumJewellery Demand for PalladiumPurchases climb to 920,000 oz
• Strong purchasing of metal in March/April as the jewellery trade stocked up
• Chinese manufacturers began mass producing palladium jewellery in Q1 2004
• Sales developed in second & third tier cities
• Chinese jewellery demand jumped to 700,000 oz
• Low metal funding costs an advantage; retailers enjoyed good profit margins
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Palladium Demand by ApplicationPalladium Demand by Application% change% change2004200420032003’000 oz
3850825Dental
10 3,8103,450 Autocatalyst: gross
29(530)(410) recovery
6955900 Electronics
47595405Other
368920250 Jewellery
226,6005,420TOTAL DEMAND
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Palladium Supply by RegionPalladium Supply by RegionTotal supply: +18%Total supply: +18%
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2003 2004
millionoz
Other
N. America
Russia
South Africa
6.45
7.62
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Palladium Supply by RegionPalladium Supply by RegionRussia: up 29% to 3.8 million oz• Norilsk mine production stable• Total includes 375,000 oz of stock sold by Stillwater • Large volume of metal shipped from State inventories
South Africa: up 8% to 2.5 million oz• Production increased in line with expanding
platinum output
North America: up 13% to 1.055 million oz• Stronger production from North American Palladium • Recovery in output at Inco
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Palladium Supply and DemandPalladium Supply and Demand
1,0201,030Movements in stocks
+187,6206,450Supply
+226,6005,420Demand
%%2004200420032003’000 oz
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Palladium price vs NYMEX net Palladium price vs NYMEX net speculative positionspeculative positionJanuary 2004 – April 2005
100
150
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J F M A M J J A S O N D J F M A
$ per oz
0
200
400
600
800
1,000'000 oz
Total Net Spec. Average Price
2004 2005
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2005 Outlook 2005 Outlook -- PlatinumPlatinum
• Market to remain close to balance
• Chinese jewellery market appears resilient, helped by less volatile price
• Diesels to drive further growth in autocatalyst demand
• Rate of growth in supplies depends on South African expansions
• Industrial consumption to remain firm
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Forecast Platinum Price For The Forecast Platinum Price For The Next 6 MonthsNext 6 Months
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700
750
800
850
900
950
1,000
N D J F M A M J J A S O N
$ per oz
2004 2005
$830 – $930
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2005 Outlook 2005 Outlook -- PalladiumPalladium
• Market surplus expected to persist
• Direction of Chinese jewellery market unclear
• Total autocatalyst demand unlikely to change
• Mine output to expand, sales from stocks to continue
• Significant increase in autocatalyst recovery
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Forecast Palladium Price For The Forecast Palladium Price For The Next 6 MonthsNext 6 Months
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100
150
200
250
300
N D J F M A M J J A S O N
$ per oz
2004 2005
$160 – $230
Platinum Platinum 20052005
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