At the time of writing 269 million doses of COVID-19 vaccines have been administered and the IMF forecast global economic growth in 2021 of 5.5 percent. There are increasing expectations that the roll-out of vaccine programmes will see economies return to normal activity, while policy support will provide additional momentum.
In this context, we forecast both platinum demand and supply to recover in 2021. Following its significant growth over the past two years we forecast that investment demand, despite remaining robust, will not rise at the same pace.
Overall, it is forecast demand will increase by 3% (+254 koz) to 7,992 koz, while supply will recover 17% (+1,126 koz) to 7,932 koz, resulting in a modest deficit of 60 koz in 2021.
In 2021 mine supply is forecast to increase by 19% (+930 koz) year-on-year to 5,899 koz, following the extreme disruptions of 2020. South Africa will account for the bulk of this increase and is forecast to be 28% (+929 koz) higher at 4,198 koz, as output recovers following the processing infrastructure failure and pandemic-curtailed mining operations in 2020.
Refined production will be supplemented in 2021 by the expected processing, refining and sale of 200 koz of semi-processed material inventory, accumulated as a result of the ACP shutdowns. This is possible despite only one of the ACP units being operational, as each unit can individually process slightly more than typical mining throughput.
Existing growth projects continue to bring modest additional volumes online, offsetting lost production from mine rationalisation and reserve exhaustion. However, with projects in Russia, North America and the Northern Limb in South Africa targeting palladium-rich ore bodies platinum supply’s upside is more limited.
Material risk for South African mine production remains, as the country’s electricity supply crisis has worsened and Eskom warns that the grid will be unreliable and supply unpredictable for the next year, until maintenance programmes are completed in December 2021.
Producers, however, are thus far successfully handling the disruption with minimal impact.
Russian output is expected to remain little changed, declining 2% (-14 koz) year-on-year to 690 koz. North American output is forecast to reach 374 koz, up 11% (+38 koz), as by-product output from nickel mining stabilises and growth from a primary producer comes online.
Output from Zimbabwe is expected to register a modest decline of 3% (-14 koz), as new mine development mostly offsets declines at two mines nearing their end-of-life.