Above-ground platinum stocks unlikely to reach zero – WPIC

May 22, 2015 - 4:40 PM GMT
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Above-ground inventories of platinum are unlikely ever to reach zero, World Platinum Investment Council CEO Paul Wilson predicted.

Sizeable above-ground stocks are often cited as the primary reason for platinum’s failure to react to the current fundamental deficit.

“[But] they certainly don’t need to reach zero for sentiment to change and there could be a change to the price level in the marketplace,” he told delegates at the Bloomberg and CME Precious Metals Forum here on Friday.

Prices are now down 50 percent at $1,150 since the all-time peaks hit in 2008 at $2,300. The metal recently struck its lowest since the post-peak crash during 2008/2009 at $1,080 per ounce.

But even during the heights of last year’s five-month strike in South Africa that skewed annual production figures, platinum peaked at just $1,520 – it had started the year at $1,371 and closed it 12 percent lower at $1,206. Many believe that above-ground inventories were the reason behind the lack of movement.

Still, above-ground stocks will hit their lowest level on record at 2.6 million ounces by the end of 2015, Wilson believes

The WPIC set the tone for this week when it suggested in its quarterly report that the predicted platinum deficit for 2015 may not be as big as initially expected.

The organisation, formed in 2014, revised its predicted deficit for this year to 190,000 ounces – 72 percent below its estimated 2014 shortfall of 670,000 ounces and well below other analysts’ estimates for this year nearer the 700,000-ounce mark.

(Editing by Mark Shaw)