Platinum May Reach $1,350/oz, Palladium $280/oz - Johnson Matthey
Source: Mining Weekly, Martin Creamer (5/18/09)
". . .supply and demand will be more closely matched in 2009 than in 2008. . .price of platinum will be much less volatile."
Any rise in commodity investment could see palladium trade at $280/oz in the next six months, but without this investor interest, palladium could trade as low as $180/oz. Johnson Matthey expects platinum to trade above $950/oz during the same period.
While demand for platinum from the automotive and industrial sectors remains poor, purchases by China's jewelry industry and by investors have offset this weakness to date in 2009.
Global platinum supplies are forecast to rise marginally in 2009 compared with the previous year.
Johnson Matthey expects that supply and demand will be more closely matched in 2009 than in 2008 and that the price of platinum will be much less volatile.
The amount of old jewelry recycled in Asia was extremely high at the start of the year but decreased sharply as the falling price squeezed recyclers' profit margins and discouraged individuals from selling secondhand pieces. The annual net demand was thus much stronger than previously expected, falling by only 6.2% to 1.37-million ounces.
Net global physical investment demand increased by 150% to 425,000 oz as Japanese investors responded positively to the falling metal price in the second half of 2008.
Palladium demand grew by 15,000 oz to 6.85-million ounces in 2008, despite the effects of the global economic slowdown.
Gross autocatalyst palladium demand fell in North America owing to a sharp decline in vehicle production but climbed in Europe, China and the rest of the world.
Net jewelry demand and investment demand both increased strongly, as did demand in many industrial sectors.
While physical investment and jewelry demand could show some growth, overall demand is expected to fall in 2009.
Primary production is set to decline, and if no sales of palladium are made from Russian State stocks, the market could be in deficit.
However, Johnson Matthey forecasts that sales will again be sufficient to keep the palladium market in surplus. Investor behavior will be key to the performance of the palladium price.