PLATINUM QUARTERLY
4th March 2020
Q4 2019
See page 4 for contents

FOREWORD
This edition of Platinum Quarterly considers platinum supply and demand developments for the fourth quarter of 2019 and for 2019,provided by SFA (Oxford). This edition also presents a new forecast for 2020, from Metals Focus, as they are the new independent
provider of our data and commentary. We also provide our views on issues and trends relevant to investors considering exposure toplatinum as an investment asset and an update on how our product partnerships continue to meet investors’ needs.
Platinum supply and demand – balanced in 2019
Platinum supply and demand were similar in 2019 resulting in a balanced platinum market – a surplus of 65 koz – in contrast to thesurplus of 790 koz in 2018. A significant increase in investment demand more than offset lower automotive, jewellery and industrial
demand compared to 2018.
Annual demand and annual change (koz)
8,500
1,170

8,060
8,000

7,270

7,500

-210
-150

-20

7,000
6,500
6,000

2018

Automotive

Jewellery

Industrial

Investment

2019

Source: SFA (Oxford)

Total demand in 2019 was 8,060 koz, 11% higher than in 2018. Exceptional investment demand of 1,185 koz (985 koz ETF and
215 koz bar and coin) was 1,170 koz higher than in 2018 and more than offset demand decreases in the automotive (-7%), jewellery(-7%) and industrial (-1%) segments.
Total 2019 supply of 8,125 koz increased by 1% (+65 koz) over 2018 with mining supply up 20 koz and recycling up 45 koz. Refined
production was flat (+5 koz) with South African production down 55 koz and all other regions collectively up 60 koz. Recycling supply
grew by 2% in 2019 with an increase in platinum recovered from autocatalysts (due to extremely high palladium and rhodium prices)more than offsetting a decrease in jewellery recycling (due to the low platinum price and lower jewellery sales in China).
Q4 2019 surplus on strong supply and weak demand
The platinum surplus of 385 koz in Q4’19 was 95 koz higher than the surplus in Q4’18 due to a year-on-year increase in mining
supply of 4%, a 2% rise in recycle supply, and a 1% decline in total demand. Total mining supply benefited from 40 koz released fromproducer working inventory, a reflection of ongoing metallurgical lock-ups and releases in 2018 and 2019. This release compensatedfor losses due to electricity supply interruptions in South Africa. Q4’19 demand was 1% lower than Q4’18 due to lower automotive(-8%), jewellery (-13%) and industrial (-5%) demand, partially offset by strong Q4 investment demand.

© World Platinum Investment Council Ltd 2020

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PLATINUM QUARTERLY Q4 2019

Quarterly demand and quarterly change (koz)
2,000
1,750

-65

-75

145

-25

1,730
1,600
1,200
800
400
0

Q4 2018

Automotive

Jewellery

Industrial

Investment

Q4 2019

Source: SFA (Oxford)

Platinum supply and demand – introducing new 2020 forecast
Metals Focus, now providing supply, demand, balance and stock data, will naturally have their own insights, modelling and forecasts.
The 2020 forecast indicates a market surplus of 119 koz with total supply of 8,117 koz and total demand of 7,998 koz.
Mine supply in 2020 will benefit from ongoing refining of work-in-process inventory from prior periods and be hampered by ongoingpower interruptions and closure of some end-of-life shafts in South Africa. Recycling supply will stay at historically high levels,
stimulated in 2019 in part by very high palladium and rhodium prices but is unlikely to rise further from this effect.
Demand in 2020 reflects increased automotive demand from heavy-duty vehicle growth and increased sales of diesel hybrid
passenger vehicles, a bottoming-out of weak jewellery demand in China, particularly strong demand in glass manufacture andstrong investment demand. ETF demand, forecast at 330 koz, is strong but far lower than the 985 koz in 2019.
Supply-demand balance, koz, 2020f
+119

8,117

Total Supply

7,998

Balance

Total Demand

Source: Metals Focus

The 2020 forecast is premised on a view that the coronavirus (Covid-19) becomes contained in a matter of months and that
economic growth recovers later this year. However, if this projection proves optimistic, forecast demand could be materially lower.
The new 2020 forecast is for a surplus of 119 koz. Platinum demand growth is from higher platinum loadings on diesel vehicles in
Europe (including mild-hybrid and plug-in mild-hybrid) and on heavy-duty vehicles in China.
We believe that a small amount of substitution of palladium by platinum has the potential to move the market from suplus to deficit,
and that recognition of this potential was partly responsible for significant buying of platinum ETFs in 2019. This driver of increased
investment in platinum ETFs is likely to continue in 2020.
The Platinum Quarterly data and report (starting on page 5) are prepared independently for WPIC by SFA (Oxford) from 2013 to2019 and by Metals Focus from 1 January 2020.

© World Platinum Investment Council Ltd 2020

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PLATINUM QUARTERLY Q4 2019

The platinum investment case – constrained supply and demand growth potential
We believe that the fundamental drivers of value for platinum are being more widely considered and that the current investment case forplatinum is more compelling than at any time since the launch of the WPIC in 2014. Supply remains constrained despite the significant
increase in the price of the basket of metals sold from platinum mining in Southern Africa and nickel mining in Russia. However, there
is insufficient confirmed capital investment to support a meaningful increase in the supply of platinum or palladium in the next 5 years.
Consequently, platinum demand growth potential from autocatalysts and fuel cells together with a bottoming out of the long-standing
decline in jewellery demand look poised to move platinum into future deficits and attract investment. The coronavirus has potential toreduce platinum demand if not contained within months. Platinum jewellery demand in China, 12% of demand in 2019 and having
reduced significantly in recent years, is particularly vulnerable to the decline in store visits associated with containing the outbreak.
Looking forward, we see the following platinum demand growth drivers supporting investment and deficits:–	Sustained investment demand: We believe the market is underestimating the impact of the significant increase in physicallybacked platinum ETFs in 2019. These purchases of 985 koz, produced transactions in the over-the-counter (OTC) or spot market
within 3 days of each ETF purchase to comply with listing requirements, and have resulted in significant additional holdingsof physical platinum bars in vaults. This ETF buying was primarily by large institutional investors, who typically take 2-year to
3-year views and are unlikely to sell these holdings in the short-term, particularly if the platinum price increases, even to levels
well above current levels. These large institutions have been aware for several years that platinum has traded at a significant
discount to platinum’s value-in-use, at levels far below those required to stimulate platinum (or palladium) supply growth and at alarge discount to gold. Consequently, these investors are more likely to hold their positions until the platinum price is near parity
with palladium (its most dominant value-in-use measure). We also believe that some large institutions that do not already own
platinum ETFs are more likely to initiate holdings in a rising price environment. Increased investment and the maintenance of
current investment will be enhanced if (or as) any evidence of demand growth becomes public.
–	
Increased automotive demand as platinum replaces palladium in gasoline and diesel car emissions control: The
unavailability of palladium has become more pronounced into 2020. Deficits of between 1.2 moz and 1.9 moz are forecast bycompetent participants in the palladium market. Wider awareness that palladium supply is unable to respond to very high prices
and physical buying by Chinese automakers (state owned joint ventures) are reflected in the palladium market price and its
sustained backwardation. This is because over 80% of palladium is produced as a by-product, to nickel in Russia and platinumin South Africa. The Russian nickel orebody is particularly high grade and is run at full capacity but has very long lead times on
output increases due to high capital investment and seasonal weather complexity. South African platinum producers typicallymake long-term investment decisions based on the fundamental supply-demand outlook. The current palladium price is unable tostimulate investment in growth as these producers know platinum is a far more likely mechanism to re-balance the market thanadditional palladium supply.
	The palladium price rose above that of platinum in September 2017 and in 2020 to date has traded, on average, $1,354/oz higher
than platinum. This remains far above the level autocatalyst manufacturers suggested as the point of substitution in gasoline
engines on cost grounds alone.
	The high price, sustained demand growth and limited supply growth of palladium now makes material platinum demand growth
due to substitution of some palladium in gasoline cars extremely likely. Details of this substitution remain proprietary andextremely confidential. Many market participants and investors are unable/unwilling to act until this confidential information is
known. Fortunately, autocatalyst fabricators, including Johnson Matthey, are acknowledging that substitution can be done and ishappening. This is still described as ‘some years off’ rather than explained as proprietary and confidential.
	The magnitude of substitution is also becoming more widely considered. Some 9.7 moz of palladium are used annually in vehicle
emissions control while only 3 moz of platinum are used in vehicles. Replacing only 5% of the palladium with platinum at a
1 to 1 ratio (also now more widely known) would require over 450 koz more of platinum and less of palladium; this will do little toameliorate the palladium deficit yet creates a significant demand increase in platinum.
	We expect increased insight into the details as to where substitution is occurring during 2020. Obvious quick wins are in large,
low temperature gasoline V6 and V8 engines in the US, in lower temperature underfloor catalyst bricks in gasoline cars andin palladium-containing diesel autocatalysts. The last-mentioned accounts for over 700 koz of palladium per annum. Platinum
substituting palladium in diesel catalysis – the natural and long-standing home of platinum – has much lower emissions control
risk than substitution in gasoline catalysis. This should significantly shorten implementation lead time.
© World Platinum Investment Council Ltd 2020

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PLATINUM QUARTERLY Q4 2019–	Increased diesel automotive demand due to increased sales: Diesel sales increased in Germany, France and Spain in Q4
2019 and may have been assisted by the increased availability of diesel hybrid and plug-in hybrid models. It was also assisted by
the extremely low levels of on-road NOx emissions of new diesel cars. Several automakers have started mainstream promotionof diesel cars, something completely absent since September 2015 when Dieselgate occurred.
	We believe the design, production and now sale of multiple diesel models was not discussed by automakers to avoid thereputational harm caused by Dieselgate but was an essential strategy to avoid fleet CO2 fines estimated to be over E14 billion
per annum from 2021 without meaningful sales of mild-hybrid diesel vehicles.
	Higher sales in 2020 of diesel SUVs with low CO2 and extremely low NOx levels, that contain more platinum per vehicle thansmaller diesel sedans, could materially lift platinum demand. Furthermore, mild hybrid diesel vehicles produce far less CO2 thanequivalent gasoline or even diesel vehicles and growth in sales of models, already on sale, will reduce CO2 fines and boost
automotive platinum demand in 2020 and beyond.
–	Growing demand for fuel cell electric vehicles: There is increasing acceptance that fuel cell electric vehicles will sit alongsidebattery electric vehicles as part of a multi-drivetrain solution to achieve zero on-road emissions. News flow related to heavy duty
and non-road fuel cell vehicle applications, including trains, increased significantly during 2019 and into 2020. Platinum’s demand
growth from fuel cells will be driven initially by heavy duty applications.
WPIC initiatives highlights
We continue to focus on increasing the number and impact of product partnerships in two of our key target markets, China
and North America.
In China initiatives launched through our Shanghai office continue to increase significantly the awareness and ownership of platinum
as an investment asset. Good progress and collaboration with our large and prestigious Chinese partners, including Bank of China,
Agricultural Bank of China and China Gold Association, continues to raise public and institutional awareness of how to invest in
platinum. Our China team continued to provide platinum training courses to our partners and to investors, training more than 3,000
bank employees alone in 2019. This training and collaboration with our four partners that are producing and selling platinum bars,
has increased our attractiveness to Chinese institutions and is helping us develop a strong and diversified partnership pipeline inChina for 2020. Our sponsorship of the China Gold Association’s Conference in December in Shanghai expanded our network andhighlighted the platinum investment case to a broader range of institutional investors.
In North America we have expanded our partner network to include partnerships with APMEX, the world’s largest online retailer ofprecious metals, and MTB, a leading precious metals merchant and financer, part of the MKS PAMP Group. We believe our greater
involvement in the promotion, supply and distribution of platinum products will support increased sales in North America in 2020.
The heightened global prominence of addressing climate change has elevated the importance of reducing CO2 emissions fromvehicles; making clean diesel and fuel cell electric vehicles more likely to provide short- and medium-term solutions in this regard.
The sustained elevated level of global debt with negative yields maintains the increased investment attractiveness of precious
metals, including platinum. This provides a helpful platform to enhance the demand growth potential that has already bolsteredplatinum’s investment case.

Paul Wilson, CEOContents
Foreword
Summary Table
2019 Full Year Review
2019 Q4 Review

P1
P5
P6
P11

© World Platinum Investment Council Ltd 2020

2020 Forecast
Expanded Tables
Glossary of Terms
Copyright and Disclaimer

P14
P18
P22
P24

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PLATINUM QUARTERLY Q4 2019

Table 1: Supply, demand and above ground stocks summary (2018 and 2019 SFA (Oxford), 2020 Metals Focus)
Q3 2019

Q4 2019

2018

2019

2019/2018
Growth %2020f

Platinum Supply-demand Balance (koz)
SUPPLY
Refined Production

1,465

1,570

6,120

6,125

0%

6,043

South Africa

1,055

1,180

4,470

4,415

-1%

4,332

Zimbabwe

115

115

465

465

0%

473

North America

80

95

350

370

6%

377

Russia

170

135

665

690

4%

690

Other

45

45

170

185

9%

171

-40

+40

+10

+25

150%

+0

1,425

1,610

6,130

6,150

0%

6,043

Increase (-)/Decrease (+) in Producer
Inventory
Total Mining Supply
Recycling

500

505

1,930

1,975

2%

2,074

Autocatalyst

385

390

1,420

1,490

5%

1,553

Jewellery

115

115

505

475

-6%

463

Industrial

0

0

5

10

100%

58

1,925

2,115

8,060

8,125

1%

8,117

Total Supply
DEMAND
Automotive

680

700

3,100

2,890

-7%

3,011

Autocatalyst

645

665

2,955

2,745

-7%

3,011

Non-road

35

40

145

150

3%

Jewellery

525

485

2,245

2,095

-7%

2,070

Industrial

475

465

1,910

1,890

-1%

2,284

Chemical

175

145

570

605

6%

629

Petroleum

50

50

235

230

-2%

186

Electrical

50

55

205

195

-5%

139

Glass

65

35

245

240

-2%

483

Medical and Biomedical

45

75

240

240

0%

249

Other

90

105

415

380

-8%

598

Investment

230

80

15

1,185

N/M

633

Bars and Coins

35

40

280

215

-23%

303

Change in ETF Holdings

205

45

-245

985

N/M

330

Change in Stocks Held by Exchanges

-10

-5

-20

-15

-25%

0

1,910

1,730

7,270

8,060

11%

7,998

15

385

790

65

-92%

119

3,160

3,225

2%

3,651**

Total Demand
BalanceAbove Ground Stocks

4,140*

Source: SFA (Oxford) 2013-2019, Metals Focus 2020. Note: The data provided cannot be compared on a like-for-like basis as Metals Focus and SFA (Oxford) use
their own insights, modelling and forecasts.
Notes:
1. Numbers have been independently rounded. N/M means not meaningful.
2. Above Ground Stocks: *As of 31st December 2012 (SFA (Oxford)). ** 3,532 koz as of 31 December 2019 (Metals Focus).
3. All estimates are based on the latest available information, but they are subject to revision in subsequent quarterly reports.
4. The WPIC did not publish quarterly estimates for 2013, Q1’14 or Q2’14. Quarterly and half-yearly estimates from periods earlier than in this report arecontained in previously published PQs which are freely available on the WPIC website.
5. The data and estimates from 2013-2019 are based on historical data and trends as well as modelling, with varying degrees of accuracy depending upon the
supply or demand category. Some historical views are based on data and modelling that pre-date WPIC publication of PQ.

Prepared by SFA (Oxford) (2013-2019) and Metals Focus (2020) for World Platinum Investment Council

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PLATINUM QUARTERLY Q4 20192019 FULL YEAR REVIEW (SFA (OXFORD))
Global demand increased by 11% (+790 koz) to 8,060 koz in 2019, owing to a dramatic jump in investment demand (+1,170 koz)
which more than offset declines in automotive (-210 koz), jewellery (-150 koz) and industrial demand (-20 koz). Investment inplatinum ETFs surged by 985 koz, with a large part of that gain occurring in the first quarter as investors took advantage of the low
platinum price and its large discount to gold and palladium.
Total supply increased 1% (+65 koz) to 8,125 koz last year, owing to growth in recycling as primary supply was essentially flat.
Global refined production was marginally higher (+5 koz) year-on-year at 6,125 koz, with growth in output from North America(+20 koz), Russia (+25 koz) and other regions (+15 koz) offsetting a decline in supply from South Africa (-55 koz), while Zimbabwean
output was unchanged. Secondary production expanded by 2% (+45 koz) as growth in automotive (+70 koz) and industrial recycling(+5 koz) was partially offset by a decline in jewellery recycling (-30 koz).
With demand increasing by substantially more than supply, the market surplus narrowed to 65 koz (Chart 1).
Chart 1: Supply-demand balance, koz, 2019
+65

8,125

Total Supply

8,060

Balance

Total Demand

Source: SFA (Oxford)

Mine Supply
Global refined platinum supply was steady year-on-year in 2019 at 6,125 koz. South African production saw a decline of
1% (-55 koz) year-on-year to 4,415 koz owing to the optimisation and streamlining of Western Limb operations in addition to
unprotected strike action on the Eastern Limb. Increased load-shedding during Q1’19 and Q4’19 resulted in the loss of some production
as some mining operations were temporarily shut down owing to lack of power. In addition, load-shedding also impacted
processing operations, meaning that an estimated 50 koz of work-in-progress (WIP) stock due to be refined last year has been
pushed out to 2020.
Supply from Russia increased by 4% (+25 koz) year-on-year to 690 koz, largely owing to the release of WIP stock material in thefirst quarter of the year. Zimbabwean output remained flat at 465 koz last year. North American supply increased by 6% (+20 koz)
year-on-year to 370 koz as a mine ramp-up in the US continues. Production from other regions recovered in 2019, increasing
9% (+15 koz) after falling by 6% in 2018. There was a net decrease in producer inventories of 25 koz during the year, meaning that
total mining supply in 2019 was 6,150 koz, a marginal rise of 20 koz year-on-year.

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

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PLATINUM QUARTERLY Q4 2019

Chart 2: Changes in supply, koz, 2019 vs. 2018

RussiaNorth
America
+20

+45
2019

1,930

2018

Other
Zimbabwe

2019

South
Africa

465

2019

465

2018

NC

4,415

2019

2018

-55

4,470

2018

185

170

+15

1,975

2019

Recycling

690

2018

665

350

370

+25

2018

2019

Source: SFA (Oxford)

Recycling
Secondary supply of platinum reached 1,975 koz in 2019, up 2% year-on-year, as expansion in autocatalyst recycling exceededa decline in jewellery recycling. The volume of recycled jewellery dipped by 6% to 475 koz owing to the weak platinum priceenvironment in Japan and the low price and challenging jewellery market conditions in China.
Autocatalyst recycling rose by 5% to 1,490 koz last year. Vehicles purchased in the mid-to-late 2000s are now increasingly reaching
the end of their lives and are being scrapped. Over that period, a combination of strong car sales, rising autocatalyst loadings andvery little substitution of platinum by palladium in diesel autocatalysts means that the amount of platinum recovered is growing.
Following the palladium price hike to above $1,000/oz in 2001, platinum use in three-way catalysts for gasoline vehicles also peakedin this period as a result of the substitution of some platinum for palladium.
The high palladium and rhodium prices compensated for a relatively low scrapped steel price in the second half of last year, andmaterial flows from scrapyards were strong. However, the high palladium and rhodium prices have also caused some problems
for the recycling industry in managing the increased working capital requirements. This, combined with refiners operating close tocapacity in the northern hemisphere, has lengthened the processing time for recovery of refined metal.

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

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PLATINUM QUARTERLY Q4 2019

DemandChart 3: Changes in demand by category, 2019 vs. 2018
8,250
8,000

7,750

7,500
koz

+1,170
8,060

7,250
-210
7,000

-150

+35

7,270

-5

-10

-5

Petroleum

Electrical

Glass

+0
-35

6,750

6,500
2018

Automotive

Jewellery

ChemicalMedical andBiomedical

Other

Investment

2019f

Industrial demand
Source: SFA (Oxford)

Automotive demand
Automotive platinum demand continued to decline in 2019, falling to 2,890 koz, down 7% year-on-year from 3,100 koz in 2018.
Western European demand continued to shrink, with lower diesel vehicle sales. However, the region remains by far the largest
market for platinum in automotive applications. Diesel’s share of new car registrations in Western Europe fell to 30.5% in 2019, from
35.9% in 2018 (source: ACEA), in an overall slow-growth light-vehicle market.
The introduction of Euro 6d emissions legislation and real driving emissions (RDE) testing, in stages from 2017 to 2020 (andbeyond), has seen significant redesign of catalytic aftertreatment and the ways in which platinum is deployed, plus an increased
variety of solutions according to vehicle size and engine designs. The standalone platinum-rich diesel particulate filter (DPF) is
increasingly being replaced by a selective catalytic reduction (SCR) brick with particulate filtering capability, the SCRF. While SCR,
which does not contain platinum, is the main NOx-removing technique, platinum-containing NOx storage catalysts (NSCs) aresometimes used in addition to SCR, and sometimes instead of a standalone diesel oxidation catalyst (DOC). The platinum-rich DOC
remains part of the system in many cases too. Overall, maintaining the platinum content of light-duty diesel aftertreatment is vital toensure automakers’ compliance with the more demanding testing of tighter emissions standards.
India, though a small market, saw the largest drop in percentage terms as light-duty diesel cars lost market share. The introductionof much more stringent BS VI emissions standards in April 2020 led many automakers to begin to axe smaller diesel cars fromtheir ranges during 2019, in this very cost-conscious market. The additional cost of aftertreatment makes diesel cars, moving froma relatively cheap DOC under BS IV, increasingly uncompetitive compared to their gasoline equivalents for which the additional
aftertreatment cost of upgrading to BS VI is much lower than for diesel powertrains. Diesel cars’ former cost advantage has beenfurther eroded as tax changes mean diesel fuel is no longer significantly cheaper than gasoline fuel.

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

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PLATINUM QUARTERLY Q4 2019

Jewellery demand
Global jewellery demand is estimated to have contracted by 7% to 2,095 koz in 2019 relative to 2018 levels. Almost all the contraction
was in China, where demand fell by 14% year-on-year to 945 koz. China’s platinum jewellery market is now more than 1 moz lower
than peak levels in 2013. Industry organisations and fabricators have ramped up efforts to bring more innovative products tomarket, but the effect on overall demand is yet to be seen. According to data from the National Bureau of Statistics of China (NBS),
jewellery retail sales in mainland China grew by just 0.4% in 2019 – with annual metal price increases of 19% and 22% for gold andplatinum respectively – making the jewellery industry the sector with the second-lowest growth among the 15 retail sectors that the
NBS tracks.
Jewellery demand in Japan had a tumultuous year with strong buying in the first three quarters followed by a sharp fall at the endof the year, as the government implemented a sales tax hike from 8% to 10% on 1 October which impacted overall sales for theyear. Demand in Japan fell by 15 koz to 330 koz in 2019. In the US, purchasing of platinum jewellery held up relatively well at
275 koz for the year (compared to strong demand of 280 koz in 2018), and solid bridal sales helped to offset ongoing structuralchanges in the jewellery industry as sales shifted from ‘bricks and mortar’ to e-commerce. The ongoing price discount to gold also
aided platinum jewellery sales. It was a similar picture in Europe, although the shift to lighter-weight pieces dampened meaningful
upside to jewellery sales, with demand reaching 260 koz. Platinum jewellery sales increased by an estimated 8% to 210 koz in India.
An economic slowdown, along with high gold prices impacting jewellery store footfall and consumer budgets, hindered further upsideto platinum jewellery demand.
Chart 4: Demand end-use shares, 2019 vs. 2018
Other
6%

Medical andBiomedical 3%
Glass 3%

Investment
0%

Investment
15%

Other
5%

Electrical 3%
Petroleum 3%

Industrial
26%

Chemical 8%

2018
Demand7,270 koz

Medical andBiomedical 3%
Automotive
43%

Glass 3%
Electrical 2%

Industrial
23%
2019
Demand8,060 koz

Automotive
36%

Petroleum 3%
Chemical 7%
Jewellery31%

Jewellery
26%

Source: SFA (Oxford)

Industrial demand
Industrial demand for platinum fell by 1% (-20 koz) to 1,890 koz in 2019, with lower requirements for electrical devices (-10 koz),
petroleum catalysts (-5 koz), glass fabrication (-5 koz) and other end-uses (-35 koz), while usage in medical applications remained
flat year-on-year. However, greater chemical demand (+35 koz) partly negated the declines elsewhere last year, lessening the overall
drop in industrial demand.
Chemical
Platinum use in the chemical industry rose by 6% to 605 koz last year, primarily owing to significant growth in China (+40 koz).
China’s chemical demand was boosted by the substantial expansion of paraxylene capacity in Zhejiang and Liaoning Provinces in
2019, associated with the construction of large integrated refining and petrochemical complexes in these regions, while domestic
requirements for platinum-based propane dehydrogenation (PDH) capacity and silicone production also increased. Outside of
China, demand was relatively stable last year, with a slight fall in the RoW region the main variation, owing to lower use in the PDH
and paraxylene markets.
Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

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PLATINUM QUARTERLY Q4 2019

Petroleum
Net petroleum requirements dropped by 2% to 230 koz in 2019, as growth in China and the RoW was more than offset by reductionsin North America and Western Europe. The closure of a large petroleum refinery in the US cut net demand in North America lastyear as recovered metal from the facility was returned to market, whilst refinery reductions also decreased new metal requirements
in Western Europe. Conversely, faster growth of catalytic reforming and isomerisation capacity in China plus ongoing expansion in
the RoW (e.g. in India and West Asia) lifted platinum use in these regions, supported by tighter automotive emissions standards (i.e.
China 6 and Bharat Stage VI).
ElectricalElectrical demand decreased by 5% to 195 koz last year, following lower usage by hard disk drive (HDD) manufacturers in China
and the RoW. HDD sales declined by 15% in 2019 with fewer units shipped in all segments, even in the enterprise market (down10%), owing to soft PC sales and substitution to solid-state drives (SSDs). As a result, the total number of platters (disks) requiredfor HDDs dropped by 8% year-on-year, weakening overall platinum consumption in the electrical sector.
Glass
Platinum use in glass fabrication declined by 2% to 240 koz in 2019, owing to weaker demand in the RoW, while requirements
elsewhere remained relatively stable. Many of the new facilities and expansions in the RoW region were commissioned relatively
early last year, including in Africa, South America and Russia, meaning much of the new metal required was likely purchased late in2018 rather than in 2019, thereby boosting platinum requirements in 2018 at the expense of demand last year.
Other
Platinum consumption in other industrial end-uses weakened by 8% to 380 koz last year, largely owing to softer demand in Japan,
North America and China. Lower ICE-based vehicle production in several regions, including China, the US and Europe, reduced
platinum usage in other automotive applications, such as sensors and plugs, while thrifting by fuel cell manufacturers also decreased
requirements for transportation and stationary fuel cell applications, despite further growth in unit volumes.
Investment demand
2019 was a remarkable year for platinum investment as global demand exceeded 1 moz. Record inflows into platinum ETFs alongwith solid bar and coin demand meant that investment demand reached 1,185 koz, which was only slightly offset by a decline inexchange stock holdings of 15 koz.
Net investment into platinum ETFs was 985 koz and each quarter saw net purchases for the first time since 2013. The majority of thegains occurred in the first quarter, when ETFs saw record inflows of 693 koz globally. The platinum price was trading below $800/oz
at the start of the year, close to its lowest level since 2008, and remained near to $800/oz for the whole of the first quarter. Investors
clearly took advantage of the low platinum price, with its large discount to gold and palladium also making it look cheap in relative
terms. Such a large flow of money into ETFs indicates that a significant portion of the investment was by institutional investors.
South African investors acquired 418 koz in Q1’19, the largest quarterly increase in ETF holdings of any region last year. However,investors took some profits during the middle of the year as the rand price rose above ZAR14,000/oz for the first time since 2016.
With some additional purchases in Q4’19, total South African ETF holdings ended the year up 367 koz, which was enough to taketotal holdings to 1,169 koz, above 1 moz for the first time since 2015.
Investors in the UK increased their ETF holdings by the largest amount over the year, adding 420 koz. This saw UK holdings reach
820 koz and overtake those in the US where investors’ net purchases of 130 koz took their total ETF holdings to 781 koz. Swiss
ETF holdings expanded steadily through the year, growing by 66 koz, with total holdings reaching 466 koz. In Japan, investors madesome additions to their ETF holdings in Q2’19, but some profit-taking in the second half of the year as the price rose above ¥3,300/g
resulted in net sales of 13 koz for the year as a whole.
Bar and coin demand totalled 215 koz in 2019. Japanese investors’ enthusiasm for platinum bars has cooled somewhat as they havebecome more accustomed to the weak platinum price, and so purchases were notably lower than in 2018 even though the pricedipped below ¥3,000/g several times during the year. Global platinum coin sales were similar to those in 2018.
Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

Page 10 of 24

PLATINUM QUARTERLY Q4 20192019 Q4 REVIEW (SFA (OXFORD))In Q4’19, refined platinum production grew slightly year-on-year (+5 koz) to 1,570 koz as South Africa (+10 koz), North America(+5 koz) and other regions (+5 koz) increased output. This was partly offset by a reduction in supply from Zimbabwe (-5 koz) andRussia (-10 koz) year-on-year. Total mining supply increased by 4% (+65 koz) year-on-year to 1,610 koz as producer inventory fell,
contributing 40 koz to supply. Secondary platinum supply grew by 2% year-on-year (+10 koz) to 505 koz, as automotive recycling
increased (+10 koz) while the contribution from recycled jewellery was unchanged.
Global platinum demand was 1,730 koz, down 1% year-on-year. Declines in automotive (-65 koz), jewellery (-75 koz) and industrial
demand (-25 koz) more than offset a recovery in investment demand which was 80 koz in Q4’19 compared to a net decrease of
65 koz in Q4’18.
The fourth quarter saw total supply increase quarter-on-quarter whereas demand slipped back, which widened the market surplus
to 385 koz (Chart 5).
Chart 5: Supply-demand balance, koz, Q4 2019

+385

2,115
1,730

Total Supply

Balance

Total Demand

Source: SFA (Oxford)

SupplyRefined platinum production was marginally higher year-on-year at 1,570 koz in Q4’19. South African output was adversely affectedby a significant increase in electricity load-shedding during the period, but despite this refined production grew by 1% year-on-year to1,180 koz in Q4’19. A combination of improved concentrator efficiencies and throughput together with the processing of high-gradeore stockpiles more than offset the loss in production related to Eskom power outages.
Output from Zimbabwe reduced by 4% year-on-year to 115 koz, while output from North America increased by 6% year-on-year to
95 koz as an expansion project continues to ramp up. Russian output was down by 7% year-on-year to 135 koz in Q4’19 while supply
from other regions was up by 13% year-on-year to 45 koz. There was a net decrease of 40 koz in producer inventory levels during
the quarter, resulting in total mining supply of 1,610 koz, an increase of 4% year-on-year.
In the fourth quarter, total secondary platinum supply was 505 koz. The amount of metal recovered from autocatalysts was up 3%
year-on-year at 390 koz, whereas jewellery recycling was flat at 115 koz.

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

Page 11 of 24

PLATINUM QUARTERLY Q4 2019

DemandQ2 2019

Industrial
Q3 2019

1,730

80

465

490

485
JewelleryQ1 2019-65

Automotive
Q4 2018

560

700

765

1,750

Chart 6: Platinum demand, koz

Investment

Total

Q4 2019

Source: SFA (Oxford)

Automotive demand
Fourth quarter automotive demand was down 8% year-on-year to 700 koz from 765 koz in Q4’18. Compared to the previous quarter
though, demand was up 3% from 680 koz.
This was another quarter in Western Europe when vehicle sales patterns were significantly distorted in response to impending
emissions legislation changes. Comparisons benefitted from a weak fourth quarter in 2018 after disruption from the introduction of
WLTP emissions testing standards. The introduction of tougher EU-wide 95 g/km CO2 emissions targets, beginning in January 2020and coming from a fleet average of about 120 g/km CO2 at the beginning of 2019, is forcing automakers to rethink their powertrain
choices to avoid punitive fines.
Diesel passenger car registrations in the EU overall fell by 3.7% to 1.045 million units in Q4’19 from 1.084 million units in Q4’18(source: ACEA). However, during Q4’19 several of the larger markets showed signs of recovery compared to Q4’18: diesel car
registrations were up by 4.3% in Germany and by 7.3% in France, with double-digit growth in some of the smaller markets. Sales
figures in December are likely to have been boosted by the pulling-forward of some sales, as some larger diesel cars with therefore
high CO2 emissions were registered early to avoid adversely affecting automakers’ 2020 CO2 figures.
Jewellery demand
Total platinum consumption for jewellery was an estimated 485 koz in Q4’19, a 13% fall on the same quarter in 2018. China’s demand
led the contraction with a year-on-year reduction of 60 koz to 225 koz. Platinum purchasing on the Shanghai Gold Exchange by
jewellery end-users declined by 18% year-on-year in Q4’19. Fabricators reported that a significant drop occurred towards the yearend in both gold and platinum jewellery, flattening seasonality. Despite the differences between gold and platinum – in marketing
and R&D efforts – both jewellery categories fell victim to changing consumer tastes as fewer shoppers purchased jewellery. This isconfirmed by the lacklustre jewellery sales performance at major retailers. Chow Tai Fook’s same-store sales volume dropped 9%
and 47% for mainland China and Hong Kong & Macau, respectively. Luk Fook reported a 25% decline in its same-store sales forthe group. The company explained that higher prices, the China-US trade war and social unrest in Hong Kong all impacted sales.

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

Page 12 of 24

PLATINUM QUARTERLY Q4 2019

The retail sales environment following the consumption tax hike on 1 October in Japan was extremely challenging, particularly fordiscretionary products. Sales were also hampered by a record typhoon season in the region. Most consumers bought ahead of thetax hike, leaving demand higher than normal in Q3’19 but yielding the lowest quarterly platinum jewellery demand in Q4’19 since
SFA began capturing quarterly data in 2013. Demand for platinum fell by an estimated 24% year-on-year to 65 koz in the quarter.
Meanwhile, India is in the grip of a severe downturn in economic growth. High gold prices have led to shrinking sales of gold
jewellery, so the modest growth in platinum jewellery demand, albeit not at the strong growth rates seen in the past, is still significant.
Demand for platinum was an estimated 55 koz in Q4’19, a rise of 5 koz on the same period last year. US jewellery consumption
remained flat year-on-year at 55 koz.
Industrial demand
Fourth quarter industrial demand for platinum declined by 5% year-on-year to 465 koz, predominantly owing to lower requirements
for glass fabrication. Comparatively few new glass manufacturing facilities are expected to be commissioned in early 2020 versus
the same period the year before, particularly in the RoW, reducing new metal buying by the glass industry in Q4’19. However,new paraxylene capacity commissioned in China during Q1’20 boosted chemical requirements in the last quarter of 2019, slightly
offsetting the demand decline in the glass sector.
Investment demand
Total investment demand was 80 koz in Q4’19, as moderate purchases of ETFs and bars and coins were slightly offset by a fallof 5 koz in exchange stocks (Chart 7).
Bar and coin purchases totalled 40 koz, a modest increase over Q3’19, as bar investment was slightly higher and coin sales wereat a similar level to the previous quarter. Japanese investment in platinum bars picked up slightly in Q4’19 compared to Q3’19 eventhough the local platinum price was, on average, slightly higher and the consumption tax was raised to 10% from 8% at the beginningof October.
Net purchases of ETFs totalled 45 koz. There were some distinct regional differences: Swiss investors added 22 koz whereas
US ETF holdings fell by the same amount. South African investors added 20 koz to their holdings and UK investors’ net purchases
were 29 koz, while in Japan ETF holdings were down by 5 koz.
Chart 7: Platinum investment
800
600

koz

400
200
0
-200
Q4 2018
Bars and coins

Q1 2019
ETFs

Q2 2019

Q3 2019

Q4 2019

Exchange stocks

Source: SFA (Oxford)

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

Page 13 of 24

PLATINUM QUARTERLY Q4 20192020 FORECAST (METALS FOCUS)
For 2020, global supply is forecast to reach 8,117 koz. This reflects total mining supply of 6,043 koz and global recycling of
2,074 koz. Set against this, total demand is expected to stand at 7,998 koz. The key sub-components are automotive demand(3,011 koz), jewellery demand (2,070 koz), industrial demand (2,284 koz) and investment demand (633 koz).
Overall, global platinum demand in 2020 is expected to fall short of supply generating a market surplus of 119 koz (Chart 8).
Chart 8: Supply-demand balance, koz, 2020f
+119

8,117
7,998

Total Supply

Balance

Total Demand

Source: Metals Focus

Mine supply
Global refined production of 6,043 koz is forecast for 2020, supported by the refining of work-in-process inventory. South African
output is forecast to decline modestly to reach 4,332 koz, with the expectation that continued power outages will affect all mines andrefineries and there will be a drop in production due to the closure of several end-of-life shafts.
Growth in refined production is expected at two mine expansion projects in South Africa and one in the US. Refined productionin Russia is expected to stabilise after planned smelter maintenance, while output from Zimbabwe is expected to remain stable.
Our projections see no change to refined producer inventories in 2020.
Recycling
The recovery of platinum from autocatalysts in end-of-life vehicles is expected to remain at historically high levels in 2020, at aforecast total of 1,553 koz. However, we expect to see a smaller contribution from destocking by scrap yards, which was a feature
for much of 2019.
Jewellery recycling is forecast to fall to 463 koz this year as lower volumes from China are only partly offset by gains elsewhere.
The drop in China is due to the forecast decline in jewellery sales (and so fewer new-for-old transactions), plus a smaller remelt ofslow selling trade stocks (as a good portion of the structural market change is now behind us). One driver of the gains in westernmarkets is a forecast rise in the gold price, as consumers can often add platinum pieces to the gold items that they are taking to
scrap collectors. The projected rally in platinum prices will also make collectors more eager to pass the platinum, they have collected,
onto refiners.
Industrial recycling is expected this year to contribute 58 koz to global platinum supply.

Prepared by Metals Focus (2020) for World Platinum Investment Council

Page 14 of 24

PLATINUM QUARTERLY Q4 2019

Automotive demand2020 may be the year that sees platinum automotive demand turn a corner. Our latest projections see demand rising modestly thisyear to reach 3,011 koz. The biggest contribution to the increase is forecast to come from China. We expect the share of China VI
compliant heavy-duty diesel vehicles to increase considerably and, in doing so, will see platinum offtake from that segment almost
double from its 2019 levels. Coupled with gains from the use in light commercial vehicle aftertreatment systems, total platinum
demand in China is expected to continue increasing and reach 260 koz.
We expect a very slight increase in automotive demand in Europe which is arguably as important, if not more so, than the gains
in China. We forecast 1,490 koz in 2020. In part this reflects diesel’s market share of European passenger car production in2020 being virtually unchanged compared to 2019, with sales lower but now reducing at a far slower rate than in previous years.
Importantly, a far larger share of these (8.3% in 2020 compared to 4.4% in 2019) will be hybrid, requiring higher PGM loadings todeal with frequent cold starts. We expect that, even though the total number of diesel vehicles produced in 2020 will be lower than
was the case last year, the amount of platinum they will use will increase.
Jewellery demand
Global demand is expected to see a further loss of demand in China, but this will be almost offset by gains elsewhere. Overall,
jewellery offtake is expected to reach 2,070 koz this year.
In China, the challenge of competition from a more dynamic gold jewellery sector looks likely to persist, even if we have seen
the worst of the associated losses, as sales of plain conventional platinum pieces gradually bottom out. A healthier overall result,however, has been ruled out by the outbreak of the coronavirus, which is expected to put strong pressure on the jewellery sector
more generally. Sales of all jewellery will be hit hard by this as the Chinese New Year has traditionally been the peak time for thejewellery market. In addition, a slowing economy and weaker growth in disposable incomes will weigh on consumer spending on
jewellery.
We should caution that this forecast is premised on a view that the coronavirus becomes contained in a matter of months and that
economic growth soon resumes. However, this projection may prove too optimistic. On a more positive longer-term note, we havereceived feedback from some leading manufacturers that they will continue to make efforts in product development, focusing on
more integration of alternative materials, to present the consumer with improved choices.
In contrast, demand in Japan is expected to grow in 2020 thanks to the boost from the Tokyo Olympics and the backdrop of benign
economic conditions in the country. This also rests partly on the assumption that the coronavirus crisis in Asia dissipates within thenext two to three months.
Demand in Europe and North America should also show gains as bridal sales continue to benefit from platinum’s discount to gold.
High-end jewellery and watch fabrication should also bounce back thanks to restocking and stronger consumer sales as US-China
tensions ease. Lastly, we may start to see the substitution of palladium with platinum in white gold alloys, as platinum-based ones
move beyond the trial stage.
We expect demand to recover in India 2020 due to improvements in the economy and an easing of the liquidity crunch. In particular,
we expect economic growth to benefit demand during the second half of the year, in time for the festive and wedding season,encouraging stock building at the retail level and increasing sales to end consumers.

Prepared by Metals Focus (2020) for World Platinum Investment Council

Page 15 of 24

PLATINUM QUARTERLY Q4 2019

Industrial demand
Total industrial demand for platinum is forecast to increase to 2,284 koz in 2020. Key to this is the expected robust performance fromthe glass industry.
Chemical
Platinum chemical offtake is expected to face challenges in 2020, but total volumes will remain elevated by historical standards.
We anticipate a small decline, largely premised on a slower pace of petrochemical capacity expansion in China. The coronavirus
outbreak has already resulted in supply disruptions in the petrochemical industry, while plants that are currently under construction
could also face delays. More generally, the weak oil price and rising US oil supplies could see investors re-evaluate their commitment
to capacity expansion. Elsewhere, a small recovery is expected for platinum use in nitric acid production, as growth in fertiliser output
continues. We expect platinum consumption in silicone production to also continue to strengthen.
Petroleum
In 2020, we expect net platinum fabrication to reach 186 koz. The ongoing coronavirus outbreak and consequent sharply lower fueluse will also negatively impact the petroleum industry. Meanwhile, after a rapid ramp-up in oil refining capacity in recent years, arising petrol surplus has put pressure on refinery margins and capacity expansion has fallen. In the Middle East, geopolitical tensions
and weak economic conditions will also slow capacity growth.
Electrical
The hard disc drive (HDD) industry is looking to maintain its competitiveness by boosting capacity through adding more disks per
drive, or through the introduction of heat-assisted magnetic recording (HAMR) and microwave-assisted magnetic (MAM) recording.
Helium-sealed HDDs, at present the mainstream technology in the data-storage sector, can incorporate up to 10 disks, compared toa maximum of five in conventional air-filled designs.
Looking ahead, both HAMR and MAMR drives are scheduled to achieve commercial production in the second half of this year, whichshould help HDDs retain their market share, including in nearline and data centre storage solutions. Having said all this, pressureson the sector, for instance relating to an ongoing shift to solid state drives, will persist. As such, we expect to see a modest decline
for platinum offtake, which should reach 139 koz this year.
Glass
In 2020 we expect to see very strong demand from the glass sector. LCD glass furnace construction will be fuelled by healthy
increases in Chinese capacity as well as the replacement of some Japanese furnaces with significantly larger ones. We expect
demand for glass fibre manufacture to be steady, supported by continued growth in global capacity.
Medical and biomedical
The growing list of medical and biomedical product categories, that are consuming platinum, means that we expect this broad
segment to achieve growth going forward, albeit modestly. However, there will be some offset from reduced dental demand, due toongoing structural losses in this segment. Overall, in 2020, we expect global medical and biomedical demand will reach 249 koz.
Other
Total other industrial demand is forecast to reach 598 koz in 2020, the result of strong growth in platinum use in spark plugs andsensors and a healthy (yet still modest in absolute terms) fuel cell segment.
Taking each in turn, ever-tightening emissions legislation and higher demands on engines’ ignition systems support growth indemand for platinum and platinum-iridium tipped sparkplugs, due to their superior performance over nickel tipped ones. Furthermore,
the increasing complexity of vehicle emissions control requires more platinum-based sensors per car, driving automotive
demand growth.
The fuel cell industry will continue to see increased platinum use in both stationary devices and across parts of the transportationindustry. Platinum demand remains modest overall but will continue to realise year-on-year gains in 2020.

Prepared by Metals Focus (2020) for World Platinum Investment Council

Page 16 of 24

PLATINUM QUARTERLY Q4 2019

Investment demand
Total investment in 2020 is expected to reach 633 koz. We are forecasting that ETF holdings will rise by 330 koz. This would taketotal ETF holdings to a new record high of 3,707 koz by the end of 2020. Although we do not expect to see a repeat of 2019’s record
performance, our forecast of further upside for the platinum price will attract new investment in the ETF market, which should offset
any profit taking. Furthermore, the expectation among some investors, that the massive platinum-palladium differential will result in
substitution gains for platinum in the automotive industry, should also attract new inflows into platinum ETFs.
Coin and bar demand this year is expected to reach 303 koz. This subdued performance will reflect the fact that rising prices will
generate two responses. First, some buying will emerge from those investors who decide to enter the market before further pricegains emerge. This, however, will be partially offset as others decide to book profits.
ABOVE GROUND STOCKSOur estimate of above ground stock, in line with the WPIC definition of above ground stocks,*** at 31 December 2019 is 3,532 koz.
Global platinum demand in 2020 is expected to fall short of supply generating a market surplus of 119 koz. This will result in above
ground stocks of 3,651 koz at the end of 2020.
*** The WPIC definition of above ground stocks is: The year-end estimate of the cumulative platinum holdings not associated withexchange-traded funds, metal held by exchanges or working inventories of mining producers, refiners, fabricators or end-users.

Prepared by Metals Focus (2020) for World Platinum Investment Council

Page 17 of 24

PLATINUM QUARTERLY Q4 2019

Table 2: Supply, demand and above ground stocks summary – (2013 to 2019 SFA (Oxford), 2020 Metals Focus)
2013

2014

2015

2016

6,070

4,855

6,160

6,035

4,355

3,115

4,480

4,255

2017

2018

2019

2019/2018
Growth %

2020f

6,125

6,120

4,380

4,470

6,125

0%

6,043

4,415

-1%

4,332

Platinum Supply-demand Balance (koz)
SUPPLY
Refined Production
South Africa
Zimbabwe

405

405

405

490

480

465

465

0%

473

North America

355

400

385

395

365

350

370

6%

377

Russia

740

740

710

715

720

665

690

4%

690

Other

215

195

180

180

180

170

185

9%

171

Increase (-)/Decrease (+) in Producer
Inventory

-215

+350

+30

+30

+30

+10

+25

150%

+0

Total Mining Supply

5,855

5,205

6,190

6,065

6,155

6,130

6,150

0%

6,043

Recycling

1,980

2,035

1,705

1,840

1,890

1,930

1,975

2%

2,074

Autocatalyst

1,120

1,255

1,185

1,210

1,325

1,420

1,490

5%

1,553

Jewellery

855

775

515

625

560

505

475

-6%

463

Industrial

5

5

5

5

5

5

10

100%

58

7,835

7,240

7,895

7,905

8,045

8,060

8,125

1%

8,117

Total Supply
DEMAND
Automotive

3,125

3,250

3,365

3,455

3,325

3,100

2,890

-7%

3,011

Autocatalyst

2,985

3,100

3,230

3,315

3,185

2,955

2,745

-7%

3,011

Non-road

140

150

140

135

140

145

150

3%

Jewellery

2,945

3,000

2,840

2,505

2,460

2,245

2,095

-7%

2,070

Industrial

1,485

1,575

1,685

1,790

1,685

1,910

1,890

-1%

2,284

Chemical

535

540

505

560

565

570

605

6%

629

Petroleum

50

65

205

215

100

235

230

-2%

186

Electrical

195

215

205

195

210

205

195

-5%

139

Glass

145

175

200

205

180

245

240

-2%

483

Medical and Biomedical

220

220

225

230

235

240

240

0%

249

Other

340

360

345

385

395

415

380

-8%

598

Investment

935

150

305

535

275

15

1,185

N/M

633

Bars and Coins

-5

50

525

460

215

280

215

-23%

303

Change in ETF Holdings

905

215

-240

-10

105

-245

985

N/M

330

Change in Stocks Held by Exchanges

35

-115

20

85

-45

-20

-15

-25%

0

8,490

7,975

8,195

8,285

7,745

7,270

8,060

11%

7,998

Total Demand
BalanceAbove Ground Stocks

4,140*

-655

-735

-300

-380

300

790

65

-92%

119

3,485

2,750

2,450

2,070

2,370

3,160

3,225

2%

3,651**

Source: SFA (Oxford) 2013-2019, Metals Focus 2020. Note: The data provided cannot be compared on a like-for-like basis as Metals Focus and SFA (Oxford) use
their own insights, modelling and forecasts.
Notes:
1. Numbers have been independently rounded. N/M means not meaningful.
2. Above Ground Stocks: *As of 31st December 2012 (SFA (Oxford)). ** 3,532 koz as of 31 December 2019 (Metals Focus).

Prepared by SFA (Oxford) (2013-2019) and Metals Focus (2020) for World Platinum Investment Council

Page 18 of 24

PLATINUM QUARTERLY Q4 2019

Table 3: Supply and demand summary – quarterly comparison
Q1
2018

Q2
2018

Q3
2018

Q4
2018

Q1
2019

Q2
2019

Q3
2019

Q4
2019

Q4’19/Q4’18 Q4’19/Q3’19
Growth %Growth %Platinum Supply-demand Balance (koz)
SUPPLY
Refined Production

1,300

1,605

1,665

1,565

1,470

1,610

1,465

1,570

0%

7%

South Africa

915

1,160

1,230

1,170

1,020

1,160

1,055

1,180

1%

12%

Zimbabwe

115

115

120

120

115

120

115

115

-4%

0%

North America

90

85

90

90

85

100

80

95

6%

19%

Russia

140

200

180

145

205

185

170

135

-7%

-21%

Other

40

45

45

40

45

45

45

45

13%

0%

-5

+55

-20

-20

+5

+20

-40

+40

N/M

N/M

1,295

1,660

1,645

1,545

1,475

1,630

1,425

1,610

4%

13%
1%

Increase (-)/Decrease (+) in Producer
Inventory
Total Mining Supply
Recycling

460

480

490

495

480

485

500

505

2%

Autocatalyst

330

345

365

380

355

360

385

390

3%

1%

Jewellery

130

135

125

115

125

125

115

115

0%

0%

Industrial
Total Supply

0

0

0

0

0

0

0

0

N/M

N/M

1,755

2,140

2,135

2,040

1,955

2,115

1,925

2,115

4%

10%

3%

DEMAND
Automotive

800

815

715

765

760

750

680

700

-8%

Autocatalyst

765

775

680

735

725

715

645

665

-10%

3%

Non-road

35

40

35

40

40

40

35

40

0%

14%

Jewellery

580

570

550

560

550

535

525

485

-13%

-8%

Industrial

475

475

465

490

470

485

475

465

-5%

-2%
-17%

Chemical

145

135

155

135

150

145

175

145

7%

Petroleum

55

55

55

55

50

50

50

50

-9%

0%

Electrical

55

50

50

55

55

50

50

55

0%

10%

Glass

60

60

65

65

65

75

65

35

-46%

-46%

Medical and Biomedical

55

70

45

70

55

70

45

75

7%

67%

Other

105

105

95

110

95

95

90

105

-5%

17%

60

-55

65

-65

770

100

230

80

N/M

-65%

85

70

70

50

75

60

35

40

-20%

14%

Change in ETF Holdings

-15

-125

5

-115

695

40

205

45

N/M

-78%

Change in Stocks Held by Exchanges

-10

0

-10

0

0

0

-10

-5

N/M

-50%

Total Demand

1,915

1,805

1,795

1,750

2,550

1,870

1,910

1,730

-1%

-9%

Balance

-160

335

340

290

-595

245

15

385

Investment
Bars and Coins

Source: SFA (Oxford). NB: Numbers have been independently rounded. N/M means not meaningful.

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

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PLATINUM QUARTERLY Q4 2019

Table 4: Supply and demand summary – half-yearly comparison
H1 2018

H2 2018

H1 2019

H2 2019

H2’19/H2’18 H2’19/H1’19
Growth %Growth %Platinum Supply-demand Balance (koz)
SUPPLY
Refined Production

2,905

3,230

3,080

3,035

-6%

-1%

South Africa

2,075

2,400

2,180

2,235

-7%

3%

Zimbabwe

230

240

235

230

-4%

-2%

North America

175

180

185

175

-3%

-5%

Russia

340

325

390

305

-6%

-22%

Other

85

85

90

90

6%

0%

+50

-40

+25

+0

-100%

-100%

2,955

3,190

3,105

3,035

-5%

-2%
4%

Increase (-)/Decrease (+) in Producer
Inventory
Total Mining Supply
Recycling

940

985

965

1,005

2%

Autocatalyst

675

745

715

775

4%

8%

Jewellery

265

240

250

230

-4%

-8%

Industrial
Total Supply

0

0

0

0

N/M

N/M

3,895

4,175

4,070

4,040

-3%

-1%

-9%

DEMAND
Automotive

1,615

1,480

1,510

1,380

-7%

Autocatalyst

1,540

1,415

1,440

1,310

-7%

-9%

Non-road

75

75

80

75

0%

-6%

Jewellery

1,150

1,110

1,085

1,010

-9%

-7%

Industrial

950

955

955

940

-2%

-2%

Chemical

280

290

295

320

10%

8%

Petroleum

110

110

100

100

-9%

0%

Electrical

105

105

105

105

0%

0%

Glass

120

130

140

100

-23%

-29%

Medical and Biomedical

125

115

125

120

4%

-4%

Other

210

205

190

195

-5%

3%

5

0

870

310

N/M

-64%

Bars and Coins

155

120

135

75

-38%

-44%

Change in ETF Holdings

-140

-110

735

250

N/M

-66%

Change in Stocks Held by Exchanges

-10

-10

0

-15

50%

N/M

3,720

3,545

4,420

3,640

3%

-18%

175

630

-350

400

Investment

Total Demand
Balance

Source: SFA (Oxford). NB: Numbers have been independently rounded. N/M means not meaningful.

Prepared by SFA (Oxford) (2013-2019) for World Platinum Investment Council

Page 20 of 24

PLATINUM QUARTERLY Q4 2019

Table 5: Regional demand – annual and quarterly (2013 to 2019 SFA (Oxford), 2020 Metals Focus)
Q4
2018

Q1
2019

Q2
2019

Q3
2019

Q4
2019

2013

2014

2015

2016

2017

2018

2019

2019/2018
Growth %

2020f

765

760

750

680

700

-7%

3,011

-7%

2,070

6%

629

-2%

186

-5%

139

-2%

483

0%

249

Platinum gross demand (koz)Automotive

3,125

3,250

3,365

3,455

3,325

3,100

2,890

North America

420

465

500

460

425

430

430

Western Europe

1,350

1,400

1,550

1,705

1,555

1,290

1,135

Japan

580

590

510

455

440

430

410

China

130

125

125

160

190

185

200

India

165

170

175

170

175

195

150

Rest of the World

480

500

505

505

540

570

565

2,945

3,000

2,840

2,505

2,460

2,245

2,095

200

230

250

265

280

280

275

Jewellery

560

550

535

525

485

North America
Western Europe

220

220

235

240

250

255

260

Japan

335

335

340

335

340

345

330

China

1,990

1,975

1,765

1,450

1,340

1,095

945

India

140

175

180

145

175

195

210

Rest of the World

60

65

70

70

75

75

75

535

540

505

560

565

570

605

North America

55

55

50

50

50

50

50

Western Europe

110

105

75

110

115

110

110

Japan

10

10

10

15

15

15

15

China

195

215

230

225

215

215

255

165

155

140

160

170

180

175

50

65

205

215

100

235

230

North America

40

25

-25

90

55

55

5

Western Europe

-45

-15

70

10

5

20

5

Japan

10

-35

5

0

-40

5

5

China

80

-5

45

80

45

10

30

Chemical

135

150

145

175

145

Rest of the WorldPetroleum

55

50

50

50

50

Rest of the World

-35

95

110

35

35

145

185

195

215

205

195

210

205

195

10

15

15

10

15

15

15

Western Europe

5

10

10

10

10

10

10

Japan

15

15

15

15

15

15

15

China

75

70

70

80

90

85

80

Electrical

55

55

50

50

55

North America

Rest of the World

90

105

95

80

80

80

75

145

175

200

205

180

245

240

North America

5

10

0

20

5

5

5

Western Europe

-10

15

10

5

5

35

35

Japan

0

-25

-5

-10

-10

0

5

China

90

85

95

100

85

75

75

Rest of the World

60

90

100

90

95

130

120

220

220

225

230

235

240

240

90

90

90

90

95

95

95
80

Glass

65

Medical

70

65

55

75

70

65

45

35

75

North America
Western Europe

75

75

75

80

80

80

Japan

20

20

20

20

20

20

20

China

15

15

20

20

20

20

20

Rest of the World

20

20

20

20

20

25

25

Other industrial

110

95

95

90

105

340

360

345

385

395

415

380

-8%

598

Investment

-65

770

100

230

80

935

150

305

535

275

15

1,185

N/M

633

Total Demand

1,750

2,550

1,870

1,910

1,730

8,490

7,975

8,195

8,285

7,745

7,270

8,060

11%

7,998

Source: SFA (Oxford) 2013-2019, Metals Focus 2020. Note: The data provided cannot be compared on a like-for-like basis as Metals Focus and SFA (Oxford) use
their own insights, modelling and forecasts.
Note:
1. Numbers have been independently rounded. N/M means not meaningful.

Prepared by SFA (Oxford) (2013-2019) and Metals Focus (2020) for World Platinum Investment Council

Page 21 of 24

PLATINUM QUARTERLY Q4 2019

GLOSSARY OF TERMSEuro V/VI emission standards

Above ground stocks

EU emission standards for heavy-duty vehicles. Euro V
legislation was introduced in 2009 and Euro VI in 2013/2014;
will be widely adopted later in other regions.

The year-end estimate of the cumulative platinum holdings
not associated with: exchange-traded funds, metal held byexchanges or working inventories of: mining producers, refiners,
fabricators or end-users. Typically, unpublished vaulted metal
holdings from which a supply-demand shortfall can be readily
supplied or to which a supply-demand surplus can readily flow.

Euro 5/6 emission standards
EU emission standards for light-duty vehicles. Euro 5 legislation
was introduced in 2009 and Euro 6 in 2014/2015; will be widelyadopted later in other regions.

ADH

Form factor

Alkane dehydrogenation: catalytic conversion of alkanes toalkenes. Broad term encompassing BDH and PDH.

The size of a hard disk drive (e.g. 2.5-inch or 3.5-inch) which
varies depending on the device the drive is used in.

BDH

GTL

Butane dehydrogenation; catalytic conversion of isobutane
to isobutylene.

Gas-to-liquids is a refinery process that converts natural gas toliquid hydrocarbons such as gasoline or diesel fuel.

Bharat Stage V/VI standards (BS-V, BS-VI)

HDD

Early in 2016 the Indian government announced the intention
to ‘leapfrog’ Bharat Stage V and move directly to Bharat
Stage VI, equivalent to Euro 6, in 2020.

Hard disk drive.

Conformity factor (CF)Heavy-duty vehicle.

The EU is to allow automakers to exceed current Euro 6 NOx
limits, giving time to adapt to new real-world driving emissions
rules. From September 2017 for new models and from
September 2019 for new vehicles, a CF of up to 2.1 (110%)
will be allowed over the 80 mg/km NOx limit. This CF will bephased out at the latest in 2021, then from January 2020
(new models) and January 2021 (new vehicles) a lower CF
of 1.5 will be allowed, reflecting statistical and technicaluncertainty of the tests.

ICE

Diesel oxidation catalyst (DOC)

Light commercial vehicle.

A DOC oxidises harmful carbon monoxide and unburnthydrocarbons, produced by incomplete combustion of diesel
fuel, to harmless carbon dioxide and water.

Lean NOx traps (LNT)

Diesel particulate filter (DPF) and catalysed diesel
particulate filter (CDPF)

HDVInternal combustion engine.
koz
Thousand ounces.
LCD
Liquid-crystal display used for video display.
LCV

Rhodium-based, catalyses the chemical reduction of NOx indiesel engine exhaust to harmless nitrogen.
Metal-in-concentrate

A DPF physically filters particulates (soot) from diesel exhaust.
A CDPF adds a PGM catalyst coating to facilitate oxidation andremoval of the soot. The terms are often used interchangeably.

PGMs contained in the concentrate produced after thecrushing, milling and froth flotation processes in theconcentrator. It is a measure of a mine’s output before thesmelting and refining stages.

Emissions legislationmoz

Tailpipe regulations covering emissions of particulate matter,hydrocarbons and oxides of nitrogen.

Million ounces.

ETF
Exchange-traded fund. A security that tracks an index,
commodity or basket of assets. Platinum ETFs included indemand are backed by physical metal.

Prepared by SFA (Oxford) for World Platinum Investment Council

NEDC
New European Driving Cycle vehicle emissions test.
Net demand
A measure of the theoretical requirement for new metal, i.e. netof recycling.

Page 22 of 24

PLATINUM QUARTERLY Q4 2019Non-road engines

Secondary supply

Non-road engines are diesel engines used, for example, inconstruction, agricultural and mining equipment, using engine
and emissions technology similar to on-road heavy-duty
diesel vehicles.

Recycling output.

NOx storage catalyst (NSC)
Used in light duty diesel aftertreatment to convert harmfuloxides of nitrogen to harmless nitrogen and carbon dioxide.
The PGM content is mainly platinum, with some rhodium. NSCs
may be used in conjunction with SCR technology to minimise
NOx emissions.
OECD
Organisation for Economic Co-operation and Development,
consisting of 34 developed countries.

Selective catalytic reduction (SCR)
PGM-free, converts harmful NOx in diesel exhaust to harmless
nitrogen, via a tank of urea solution. Used in heavy-duty diesel
vehicles, increasingly competes with LNT in light-duty diesel
vehicles. Contained within an aftertreatment system which
normally requires a platinum-containing oxidation catalyst
ahead of the SCR unit.
SGE
Shanghai Gold Exchange.
SSD
Solid-state drive.

oz

Stage 4 regulations

A unit of weight commonly used for precious metals.
1 troy ounce = 1.1 ounces.

European emission standards implemented in 2014 fornon-road diesel engines.

Paraxylene

Three-way catalyst

A chemical produced from petroleum naphtha extracted
from crude oil using a platinum catalyst. This is used in
the production of terephthalic acid which is used to
manufacture polyester.

Used in gasoline cars to remove hydrocarbons, carbon
monoxide and NOx. Largely palladium-based now, somerhodium.

PDH

Emissions standards phased in between 2008 and 2015 in the
US for non-road vehicles.

Propane dehydrogenation, where propane is converted
to propylene.

Tier 4 stage

WIP

PGMs

Work in progress.

Platinum-group metals.

WLTP

PMR

Worldwide Harmonised Light Vehicle Test Procedure is alaboratory test to measure pollutant emissions and fuelconsumption. WLTP replaces the New European Driving
Cycle (NEDC).

Precious metals refinery.
Producer inventory
As used in the supply-demand balance, the change in producer
inventory is the difference between reported refined production
and metal sales.

WPIC
The World Platinum Investment Council.

RDE
Real Driving Emissions – the term used by the EU to define
the testing protocol that will measure pollutants emitted fromcars, including NOx, while driven on the road. It is in addition tolaboratory tests. RDE testing was implemented in September
2017 for new types of cars and will apply to all registrations
from September 2019.

Ounce conversion
1 million troy ounces = 31.1 tonnes.

Refined production
Processed platinum output from refineries.

Prepared by SFA (Oxford) for World Platinum Investment Council

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PLATINUM QUARTERLY Q4 2019

IMPORTANT NOTICE AND DISCLAIMER: This publication is general and solely for educational purposes. The publisher, The
World Platinum Investment Council, has been formed by the world’s leading platinum producers to develop the market for platinum
investment demand. Its mission is to stimulate investor demand for physical platinum through both actionable insights and targeted
development, providing investors with the information to support informed decisions regarding platinum and working with financial
institutions and market participants to develop products and channels that investors need. No part of this report may be reproduced
or distributed in any manner without attribution to the authors. The research and commentary attributed to SFA or Metals Focus
in the publication is © SFA Copyright reserved or © Metals Focus Copyright reserved. All copyright and other intellectual property
rights in the data and commentary contained in this report remain the property of SFA or Metals Focus, two of our third party
content providers, and no person other than SFA or Metals Focus shall be entitled to register any intellectual property rights in theinformation, or data herein. The analysis, data and other information attributed to SFA or Metals Focus reflect SFA’s or Metals Focus’
judgment as of the date of the document and are subject to change without notice. No part of the data or commentary shall be used
for the specific purpose of accessing capital markets (fundraising) without the written permission of SFA or Metals Focus.
This publication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. With thispublication, neither the publisher nor SFA, nor Metals Focus intend to transmit any order for, arrange for, advise on, act as agent
in relation to, or otherwise facilitate any transaction involving securities or commodities regardless of whether such are otherwise
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publisher nor SFA, nor Metals Focus is, or purports to be, a broker-dealer, a registered investment advisor, or otherwise registeredunder the laws of the United States or the United Kingdom, including under the Financial Services and Markets Act 2000 or Senior
Managers and Certifications Regime or by the Financial Conduct Authority.
This publication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any
particular investor. Any investment should be made only after consulting a professional investment advisor. You are solely responsiblefor determining whether any investment, investment strategy, security or related transaction is appropriate for you based on yourinvestment objectives, financial circumstances and risk tolerance. You should consult your business, legal, tax or accounting advisors
regarding your specific business, legal or tax situation or circumstances.
The information on which this publication is based is believed to be reliable. Nevertheless, neither the publisher nor SFA, nor
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including statements regarding expected continual growth of the industry. The publisher and SFA and Metals Focus note thatstatements contained in the publication that look forward in time, which include everything other than historical information, involverisks and uncertainties that may affect actual results and neither the publisher nor SFA, nor Metals Focus accepts any liability
whatsoever for any loss or damage suffered by any person in reliance on the information in the publication.
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Prepared by SFA (Oxford) (2013-2019) and Metals Focus (2020) for World Platinum Investment Council

Page 24 of 24