JOHANNESBURG (miningweekly.com) – The World Platinum Investment Council (WPIC) has revised downwards its initial full-year global platinum market deficit for 2015 from 235 000 oz to 190 000 oz, despite maintaining its total supply forecast for the 12 months at 7.9-million ounces, as higher projected mining supply was expected to be offset by a reduction in secondary supply from autocatalyst recycling.

The council revealed in its third ‘Platinum Quarterly’ report on Monday that key drivers behind the continued deficit included increased jewellery demand as fabricators in China restocked following the Chinese New Year period and a decline in jewellery recycling levels in a weaker price environment.

Moreover, total mining supply remained largely flat in the first quarter of the year compared with the final quarter of last year, as higher output in South Africa and Zimbabwe was offset by declines in other regions.

“[We further observed] lower recycle supply as the fall in jewellery recycling exceeded the slight increase in autocatalyst recycling, while supply is forecast to closely match demand over the rest of the year,” the report read.

Looking to the platinum market’s performance in the first quarter of the year, the WPIC noted that it remained in deficit during the three months, with an estimated shortfall of 160 000 oz.

Total global supply of platinum was 1.8-million ounces, with total mining supply estimated at 1.3-million ounces.

South African refined production continued to recover from the 2014 strike, rising 2% from the last quarter of 2014 to 995 000 oz, while supply from Zimbabwe increased 16% quarter-on-quarter to 110 000 oz.

In contrast, supply from non-Southern African regions collectively declined 10% to 310 000 oz in the first quarter of the year.

Supply from recycling decreased 6% quarter-on-quarter to 450 000 oz and included a 3% increase in supply from spent autocatalysts from a weak final quarter of 2014. Supply was also impacted by a 23% fall in jewellery recycling following lower retail sales in China.

Total global demand increased by 75 000 oz quarter-on-quarter to 1.9-million ounces compared with the final quarter of 2014, driven largely by a 5% lift in autocatalyst demand to 825 000 oz, which was buoyed by increased European car sales and the roll-out of Euro 6-compliant catalysts.

Platinum jewellery demand for the first quarter was estimated at 750 000 oz, as jewellery manufacturers increased inventory levels after the Chinese New Year, the report outlined.

“India continues to be a standout growth market for platinum jewellery, with retail sales continuing to climb in the first quarter of the year.

“[Sales through] exchange-traded funds (ETFs) exceeded purchases in all the major investment regions in the first quarter of the year and reduced ETF holdings by 50 000 oz ,compared with the 30 000 oz reduction in the final quarter of 2014,” the council noted.

Bar and coin purchases amounted to 35 000 oz in the first quarter of the year, remaining relatively flat on the prior quarter’s performance.