Harare – The World Platinum Investment Council (WPIC) says platinum output in Southern Africa will likely decline in 2020 due to a fall in demand and new coronavirus- induced shutdowns in South Africa and Zimbabwe.
According to WPIC Platinum Q2 2020 Report, refined platinum production from South Africa, which in 2019 represented 72 percent of global production, is forecast to decline by 20 percent in 2020 with most of the losses already realised in the first half of the year.
“Mining supply is expected to recover strongly in (the second half of 2020), but still faces continued year-on-year declines as some labour-intensive underground operations have been slower to ramp-up, with two still at 50 percent of capacity at the end of (the first half of 2020).
Zimbabwean production, WPIC said, was expected to remain virtually flat as losses due to mine shut-downs were offset by operations able to release refined platinum from previously accumulated inventory.
According to WIPC 2020 demand for platinum was forecasted to decrease 11 percent.
“Automotive demand is expected to fall by 16 percent, jewellery demand by 14 percent, industrial demand to remain flat, and investment demand (comprising bar and coin demand, as well as changes in exchange-traded fund holdings and changes in stock held by exchanges) to reduce by 15 percent, all year-on-year,” the WIPC said.
For the second quarter of 2020, platinum supply was down year-on-year by 35 percent.
“Total mining supply shed 40 percent due to the constraints experienced predominantly in South Africa,” read part of the report.
South Africa in April completely closed underground mines, which constitute 75 percent of production, while open-pit mines operated on a limited basis.
Globally, South Africa (110 tonnes in 2018) is the largest platinum producer followed by Russia (21 tonnes) and Zimbabwe (14 tonnes).