PLATINUM QUARTERLY, Q3 2014 Paul Wilson
AGENDA World Platinum Investment Council Purpose, rationale and approach Platinum s investment credentials The Platinum Quarterly Paul Wilson CEO, WPIC Balances Above ground stocks Supply Demand Beresford Clarke MD and Head of Research, SFA (Oxford)
WORLD PLATINUM INVESTMENT COUNCIL We exist to develop the global market for platinum investment Founded in November 2014 Members: Anglo American, Aquarius, Impala, Lonmin, Northam, RB Plats Long-term commitment to provide platinum investors worldwide with objective and reliable platinum market data and insights Mission to stimulate investor demand for physical platinum globally through actionable insight and targeted development RESEARCH Supply and demand Stocks Investment research Investment market research MARKET DEVELOPMENT Understand markets Pursue top 10 opportunities Work with financial institutions Fill market gaps
PLATINUM S INVESTMENT CREDENTIALS Platinum is a strong investment asset. somewhat underappreciated We will provide objective analysis to examine and test the investment case for platinum. This will include benefits to investment portfolios.
TODAY - PLATINUM QUARTERLY Analysis of the global platinum market: Supply, demand, deficit and above ground stocks: 2013 and 2014f Supply, demand, surplus: Q3 2014 Significant event for WPIC but also for the platinum market: Independent analysis - SFA (Oxford) Freely available - on WPIC website Produced every quarter update of annual forecast and new quarterly data Published above ground stock estimate first point in data series Commissioned SFA (Oxford) Outstanding platinum and PGM experience Quality research house Beresford Clarke MD and Head of Research
ABOVE GROUND STOCKS Above ground stocks are a key aspect of market insight New data points shed light on the past
INDEPENDENT RESEARCH ON PLATINUM Beresford Clarke, Head of Research and MD, SFA (Oxford) Ltd
STOCK MOVEMENTS DRAWDOWN IN 2014; SURPLUS IN Q3 Supply-demand balance, koz +155-695 -885 2013 2014f Q3, 2014 Source: SFA (Oxford)
ABOVE GROUND STOCKS REDUCING koz Above ground stocks 4,500 4,000 3,500 4,140 ETFs South Africa 3,445 Mine strike South Africa 3,000 2,500 2,000 1,500 1,000 500 Largely built up since financial crisis 2,560 0 Source: SFA (Oxford) 2012 2013 2014f
ABOVE GROUND STOCKS METHODOLOGY Definition: The year-end estimate of the cumulative platinum holdings not associated with: exchange traded funds, metal held by exchanges 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. Above ground stock methodology Above ground stock All industry working inventories & measured investment holdings Source: SFA (Oxford)
Producer stock intake 4,730 Producer stock sales 5,100 6,070 5,855 MINE SUPPLY DOWN 13% ON 2013 koz Total mining supply summary 7,000 2013 2014f 6,000 5,000 215 740 215 370 4,000 3,000 2,985 400 390 2,000 1,000 0 Refined Producer Production sales Total Mining Supply South Africa Zimbabwe North America Russia Other Refined Producer Production sales Total Mining Supply Source: SFA (Oxford)
8,010 8,535 PLATINUM DEMAND: 2014 VS. 2013 DOWN 6%; AUTOS AND JEWELLERY +VE koz 9,000 Changes in demand by category, 2014f Vs. 2013 +145 +115 +50 +10 +10-20 -75 8,000-760 7,000 6,000 5,000 Source: SFA (Oxford) 2013 Automotive Jewellery Chemical Petroleum Electrical Glass Medical and Biomedical Investment 2014f
PLATINUM DEMAND: 2014 VS. 2013 INVESTMENT LOSES MARKET SHARE 3% 1% 3% 2% 2% 2% Demand end use shares, 2014f Vs. 2013 2014 Chemical 8% 2013 11% 2013 Automotive 37% 2014 Automotive 41% 2013 Chemical 7% 2014 Jewellery 38% Demand 2013 Jewellery 34% Petroleum Electrical Glass Medical and Biomedical Investment Other Source: SFA (Oxford)
SUMMARY DATA Platinum Supply-Demand Balance, (koz) 2013 2014f Growth % Q3 2014 SUPPLY Refined Production 6,070 4,730-22% 1,275 Total Mining Supply 5,855 5,100-13% 1,290 Recycling 1,985 2,025 2% 560 Total Supply 7,840 7,125-9% 1,850 DEMAND Automotive 3,140 3,285 5% 770 Jewellery 2,945 3,060 4% 745 Industrial 1,525 1,500-2% 380 Investment 925 165-82% -200 Total Demand 8,535 8,010-6% 1,695 Balance -695-885 27% 155 Above ground stocks 4,140* 3,445 2,560-26% Source: SFA (Oxford), *as of 31 st December 2012
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