| Markets and demand firm |
Markets remained robust and demand firm
during 2007.
Demand has been growing while South
African producers were experiencing
production problems, which reduced supply
into the market.
The platinum price increased by 35% to US$1,530 during 2007.
The palladium market remained in surplus during the year and saw a price increase of 9%. |
The rhodium market remained in a net
deficit position and the price remained firm
and at high levels throughout the year.
Nickel experienced a volatile year with the
metal starting the year out at US$32,940 per
tonne, rallying to US$54,000 per tonne to
close the year at US$26,200 per tonne.
This was mainly the result of an increase
in available stocks. |
|
| |
| Platinum |
 Platinum enjoys an eminence
greater than any other metal given
its beauty, rarity and unique
physical and chemical properties.
Its high corrosive resistance,
unparalleled catalytic properties
and high fusibility ensure its role in
many varied industrial uses, while
its lustre, colour, strength and
brand equity attract an increasing
following in the jewellery sector.
Demand for platinum in 2007
increased by 3% to a record 6.93
million ounces, on firm offtake in
the autocatalyst and industrial
sectors. Global supplies of
platinum are estimated to have
fallen 2% in 2007 to 6.66 million
ounces. Most South African
producers had unforeseen
disruption in production due to a
combination of industrial action,
safety-related shaft closures,
processing bottlenecks, geological
difficulties, falling efficiencies and
skilled employee shortages. Russian supplies were also lower compared to 2006
with output falling at Norilsk and at the alluvial
operations. The decrease in mined production has
shifted the market from a slight surplus in 2006 to a
deficit of an estimated 265,000 ounces in 2007. |
| |
| Platinum supply and demand |
| (000 oz) |
2007 |
2006 |
| Supply |
|
|
| South Africa |
5,220 |
5,290 |
| Russia |
820 |
890 |
| North America |
340 |
345 |
| Others |
280 |
270 |
| Total supply |
6,660 |
6,795 |
| Demand |
|
|
| Autocatalyst: |
|
|
| gross |
4,235 |
4,140 |
| recovery |
(885) |
(855) |
| Jewellery |
1,595 |
1,620 |
| Industrial |
1,905 |
1,865 |
| Investment |
75 |
(40) |
| Total demand |
6,925 |
6,730 |
| Movements in stocks |
(265) |
65 |
| Platinum demand: |
| Autocatalyst |
| (000 oz) |
2007 |
2006 |
| Europe |
2,105 |
2,095 |
| Japan |
615 |
605 |
| North America |
900 |
905 |
| Rest of the world |
|
|
| China |
210 |
155 |
| Other |
405 |
380 |
| Total |
4,235 |
4,140 |
|
| |
| AUTOCATALYST |
| Autocatalyst demand for platinum is estimated to have
increased 2% to 4.24 million ounces in 2007. A growth
in sales of diesel vehicles in Europe and increasing
production of vehicles in Asia underpinned the growth.
The growing fitment of emission control systems to
heavy duty vehicles also contributed to the increase. |
| |
| North America |
| Sales of light vehicles in the United States fell 3% in
2007 to 16.2 million units. Production of all vehicles fell
3% over 2006. Despite the decrease in vehicle output,
demand for platinum from the North American autocatalyst
sector is estimated to have been largely
unchanged in 2007 at 900,000 ounces. The switch from
platinum-rich technology to palladium-rich technology
in gasoline vehicles accelerated in 2007. The decrease
in demand from this sector however was compensated
by the increased use on medium- and heavy-duty diesel
trucks. High fuel prices have increased demand for
more fuel-efficient vehicles, which has benefited the
foreign manufacturers of motor vehicles. |
| |
| Europe |
Motor vehicle sales were stagnant in western Europe,
however, manufacturers built 1 million more vehicles
than in 2006 to feed vibrant demand in central and
eastern Europe. For the first ten months of 2007
production was up 6% to 16.4 million passenger
vehicles in greater Europe, a region that includes Russia
and Turkey.
Diesel vehicles continued to gain market share in Europe
and accounted for 52% of all new car sales. Original
equipment manufacturers (OEMs) are continuing to
shift gasoline technology out of platinum. OEMs have
implemented thrifting programmes to reduce platinum
content in diesel oxidation catalysts (DOCs) and
increase palladium content. However, fitting filters on
diesel vehicles ahead of legislative requirements
compensated for this and platinum demand in the
European autocatalyst sector (excluding Russia) increased
marginally in 2007 to 2.1 million ounces. |
| |
| Japan |
| Domestic demand for light-duty vehicles remained
lacklustre in Japan in 2007. Sales of passenger vehicles
have been declining since 2004 and are expected to be
lower in 2007 than the previous year's 4.64 million units.
The Japanese motor industry has been buoyed by
demand in export markets and production of all
vehicles increased by 9% in the first 11 months of
2007. Passenger cars certified as low-emission vehicles
now constitute 95% of all new cars in the market.
Manufacturers have managed to meet tighter emission
limits while speeding up their efforts to replace platinum in gasoline vehicles with palladium-dominant systems.
Despite this, demand for platinum is expected to have
increased in 2007 to 615,000 ounces due to higher
loadings of platinum on vehicles destined for export
markets. |
| |
| China |
| Chinese demand for platinum in the autocatalyst sector
is estimated to have increased by 36% to 210,000
ounces in 2007. Growth in Chinese automobile sales
has been strong and China became the largest Asian
market for passenger vehicles in 2007, with a concomitant increase in
automobile production. Despite a
delay in the implementation of
Euro III equivalent legislation this
year, many manufacturers are
supplying vehicles fitted with
Euro III-compliant catalytic
systems, resulting in increased
demand for platinum. |
| Platinum demand: Jewellery |
| (000 oz) |
2007 |
2006 |
| Europe |
205 |
190 |
| Japan |
305 |
360 |
| North America |
235 |
240 |
| Rest of the world |
|
|
| China |
780 |
760 |
| Other |
70 |
70 |
| Total supply |
1,595 |
1,620 |
|
| |
| Other |
| Net demand for platinum for autocatalyst fabrication in
the rest of the world is estimated to have increased by
7% in 2007 to 405,000 ounces. Strong growth in Indian and South American vehicle production is largely
responsible for the increase. |
| |
| Recovery from scrap autocatalysts |
| Higher metal prices encouraged the recycling of scrapped catalysts in 2007. Total PGM reclaimed from spent autocatalyst increased by more than 10% over 2006 to over 2 million ounces. The amount of platinum increased because of rising platinum loadings on European diesel vehicles sold in the late 1990s. The weight of palladium recovered also increased in all regions in 2007. This reflects the increase in palladium loadings on new vehicles built at the end of the last century. With the price of rhodium very high, the recycling industry is continuously increasing its efficiencies, and recovery of rhodium increased by 10,000 ounces in 2007. |
| |
| THRIFTING OF PRECIOUS METALS
IN AUTOCATALYSTS |
| |
 Thrifting of precious metals in autocatalysts has been ongoing
ever since the first autocatalysts were used in the 1970s.
The
recent announcements by Nissan (in July 2007) and Mazda (in
October 2007) to cut the autocatalyst precious metal loadings
gathered considerable attention from market commentators and
from the media. However, it is believed that their introduction
will not affect automotive sector PGM usage significantly.
There are three competing trends relating to platinum group
metal usage in the automotive industry: |
| • |
Emissions legislation is continuing to tighten all around the
world. Whenever new regulations are enacted somewhere,
average precious metal loadings on catalysts tend to rise in response. If this were the only trend, it would
lead to continual increases in metal usage for this application. |
| • |
The number of vehicles manufactured globally is also rising. As almost every vehicle now fits at least one
catalyst, rising production volumes drive the number of catalysts higher and increases the amount of
precious metal required by the car industry. |
| • |
Opposing these two trends, all of the car companies, in partnership with catalyst manufacturers, are
continually working to improve the performance of automotive catalytic converters. This equates to
designing catalysts that convert the same amount of pollutants but require a lower precious metal content
to do so. |
|
|
| This third trend has the opposite effect from the others and this cost control or thrifting process (the removal
of precious metal) has been able to keep the growth in platinum group metal requirements from the
automotive industry to manageable levels. Attempts to thrift are ongoing and, in the short to medium term,
the current announcements are not expected to have a material effect on the positive outlook for increasing
platinum group metal demand in the automotive sector. |
|
