Mr Yearsley adds: “While platinum is linked to the gold price, overall I am bullish on its long-term prospects given the huge industrial demand there.”
While tightening global emission standards have caused an upward shift in demand for platinum in catalytic convertors, what is less well documented, however, is that the largest single source of platinum demand over the past few years has been jewellery – specifically from China.
Mike McGlone, research director at ETF Securities, says: “Prior to the recession in Europe, European auto catalysts accounted for the single largest demand component for platinum. At the demand peaks in 2006 and 2007, European auto catalyst demand totalled just over 2m ounces annually, roughly double the demand from Chinese jewellery.”
In 2012, Chinese platinum jewellery demand subsequently jumped 16 per cent to just under 2m ounces, while European demand for auto catalysts declined to 1.3m ounces as the prolonged recession continued to bite.
But as Europe emerges from recession, asserts Mr McGlone, demand for platinum is likely to get a further boost as car sales increase. Meanwhile Chinese platinum jewellery demand in 2013 is on pace to be above 2.1m ounces in 2013, double the amount for 2000. Overall China is expected to account for nearly 80 per cent of total platinum jewellery demand in 2013.
Mr McGlone adds: “Based on our expectation of continued supply constraints in South Africa and improving economic conditions in China and Europe, we remain bullish about the platinum price.”
Philip Scott is a freelance journalist
PLATINUM
THE USES
LCD displays
Fibre-optic cables
Catalytic converters in motor vehicles, fitted to reduce toxic emissions such as carbon monoxide
Glassmaking equipment
Anti-cancer drugs and in implants
