Rising Auto Demand and Surge in Investment to Push Platinum Market Into Deficit, Says Johnson Matthey's Latest Pgm Market Report

- Platinum market to move into deficit in 2019 following a surge
in investment buying

- Automotive demand set to rise due to increased use of platinum
catalysts on trucks

London (ots/PRNewswire) - After recording surpluses in 2017-18 the
platinum market will move back into deficit this year, according to
forecasts published in Johnson Matthey's latest Pgm Market Report.

A surge in investment buying and higher automotive consumption
will underpin a nine percent gain in gross platinum demand in 2019,
offsetting weakness in the Chinese platinum jewellery market, where
platinum faces increased competition from karat gold jewellery.

Automotive demand for platinum will rise by three percent this
year, due to greater platinum use on trucks. In China, platinum
consumption on heavy duty vehicles will increase sharply, with strict
China VI emissions legislation due to be implemented in some
provinces and cities starting in July 2019. The new regulations will
apply nationwide from July 2020, while India will also introduce
strict emissions regulations for trucks next year.

South African platinum supplies have been flat for several years
but could rise slightly in 2019, if producers can clear processing
backlogs. However, there is some downside risk due to the potential
for disruption from electricity shortages or strikes.

Alison Cowley, Principal Analyst at Johnson Matthey plc,
commented: "Between mid 2018 and early 2019, the platinum price
traded close to ten year lows while palladium set a series of
all-time records. Some investors now think that platinum is
under-priced, given the improving outlook for automotive demand and
uncertainties over supply. This led to a dramatic turnaround in
sentiment during the first quarter of 2019, when investors bought
nearly 700,000 oz of platinum Exchange Traded Funds (ETFs). This
seems to be net new investment, rather than investors switching out
of palladium into platinum."

Palladium price reaches record highs on boom in automotive demand

- Palladium market deficit to widen as autocatalyst demand climbs 9%
- Price reaches record high of over $1,600 as selling by investors
dries up

The palladium market deficit is forecast to widen significantly in
2019, with primary and secondary supplies unable to keep pace with
the growth in automotive demand. Palladium ETF disinvestment helped
balance the market in 2018 but remaining holdings are no longer
sufficient to bridge the gap between supply and demand.

Rupen Raithatha, Market Research Director at Johnson Matthey,
said: "ETF investors redeemed over 2.2 million oz of palladium
holdings during the last four years. This helped to support market
liquidity during a period of exceptional growth in automotive demand.
However, persistent market deficits have had a real impact on the
price, which reached a record high of over $1,600/oz in March 2019.
Despite these high prices, ETF selling dried up in the first quarter
of 2019, but we think there is still some potential for profit-taking
this year."

Palladium use in autocatalysts is forecast to rise by nine per
cent in 2019. China 6 emissions legislation will be enforced
nationally in 2020, but some provinces and cities will introduce the
new standards in July this year, under the 'Blue Sky Protection
Plan.' This will result in a step change in palladium loadings on
Chinese cars.

Johnson Matthey's May 2019 Pgm Market Report includes a special
feature on European emissions legislation. Under Euro 6d legislation,
emissions compliance is being extended from the laboratory to the
real world via 'real driving emissions' testing using portable
emissions measurement equipment. This is motivating additional
palladium use on European gasoline cars.

Margery Ryan, Principal Automotive Analyst at Johnson Matthey,
added: "Euro 6d legislation is having a significant impact on the
palladium market. Vehicles are being tested under a wider range of
driving conditions, making emissions control more challenging.
Exhaust aftertreatment systems are becoming more complex and
automakers are adding more palladium to meet the new requirements."

Note to editors:

Johnson Matthey plc's Pgm Market Report can be viewed and
downloaded from the website (http://www.platinum.matthey.com/services
/market-research/pgm-market-reports) and provides an overview of
demand for platinum group metals in 2018 and an outlook for 2019. You
can follow us on Twitter at @PMMJM.

Johnson Matthey's Market Research Department has undertaken
fundamental research into the Platinum Group Metals markets since the
1980s. Since 1985, Johnson Matthey has published supply and demand
data twice yearly, in the Platinum and Interim Platinum series of
reviews (1985-2013) and in the Pgm Market Report (2014-2019).
Previous reviews and reports can be downloaded from

http://www.platinum.matthey.com/services/market-research/pgm-marke
t-reports

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ots Originaltext: Johnson Matthey
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Contact:
Rebecca Williams
Johnson Matthey plc
T: +44-(0)207-2698028
E: Rebecca.Williams@matthey.com

Original-Content von: Johnson Matthey, übermittelt durch news aktuell