Wednesday, November 25th 10:39 AM IST

Platinum market to see modest surplus in 2016:WPIC

# Platinum  # Platinum market  # WPIC  

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

LONDON (Bullion Street): 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 (WPIC) said in a report on Tuesday.

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

A 19% 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 -- jewelers, and industrial consumers.

In 2015 a drop in jewelry buying and rising mine supply has offset lower recycling and stronger automotive, investment and industrial demand to pull the market deficit back to 300,000 ounces, the WPIC forecast.

In the third quarter the deficit expanded to 320,000 ounces from a surplus of 240,000 ounces a year before, though prices fell 16%.

They slid more than 10% in September alone after the U.S. Environmental Protection Agency (EPA) said Volkswagen had cheated emissions tests on some of its diesel cars, sparking fears diesel sales could fall.

The WPIC said in its report that it assumes a limited impact on diesel auto sales, however, as consumer buying preferences do not appear to have been significantly affected so far.

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