Platinum market deficit set to evaporate in 2016: WPIC – by Jan Harvey (Reuters Africa – November 24, 2015)

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LONDON (Reuters) – The platinum market deficit will shrink this year, before moving into a small surplus in 2016 as supply from mining and recycling rises and investment falls, the World Platinum Investment Council said in a report on Tuesday.

While the WPIC does not forecast prices, a move back to near-balance could further pressure platinum, which has suffered a 30 percent drop this year, putting it on track for its biggest annual retreat since 2008.

Mine supply, which rose 20 percent this year as output from major producer South Africa normalised after last year’s five-month miners’ strike, is expected to increase another 2 percent in 2016, largely on the back of gains in Zimbabwe, the WPIC said in its Platinum Quarterly report.

A 19 percent drop in investment demand, to 130,000 ounces from 160,000 ounces, will also feed into the move into a slight surplus of 5,000 ounces next year, the WPIC predicted.

That will counterbalance slightly higher demand for platinum from carmakers — who use the metal in autocatalysts — jewellers, and industrial consumers.

“The balance is interesting,” the WPIC’s Trevor Raymond said. “Above-ground stocks are at an all-time low…and there is a bunch of sensitivities in 2016, most of which seem to be to the upside.”

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