Market Reports

Learn more about all important trends in the precious metals markets in our market reports on a regular basis.


Heraeus Precious Appraisal

  • Edition 32 - 16 September 2019

The platinum price is up, but the fundamentals point down

By the start of September, the platinum price had rallied $100/oz (16%) in two weeks. There are a number of possible explanations for this rally.

Platinum ETFs have gained over 900 koz year-to-date. All the major regions have seen increases in ETF holdings and 120 koz have been bought in the first two weeks of September. Investors may now be considering that a mine strike is more likely in South Africa as an agreement has not been reached between the two largest producers and the mining unions, so talks have entered arbitration. However, in South Africa, ETF investors have been taking profits and selling some of their ETF holdings. In the first quarter, South African investors bought 418 koz, but since then they have sold just over 50 koz. The recent surge in ETF investment has been in the UK, with investors buying 112 koz in the first two weeks in September, and this may well be a reaction to the political turmoil around the UK’s attempt to leave the EU.

Platinum certainly is very cheap relative to gold and palladium. The premium of gold over platinum reached a record $678/oz in mid-August and is now $540/oz. Palladium’s premium reached $761/oz in July and is currently $648/oz.

Platinum’s fundamentals are not good. Autocatalyst demand has been declining for some time, as has jewellery demand in China, but the rates of decline have eased this year. Perhaps the view of investors is that all the bad news has been priced in and $800/oz is now a floor under the platinum price. Even with large flows into ETFs, the market is still expected to be in surplus this year.

Platinum’s sharp price rally is most likely down to short covering. The jump in the platinum price in late August took it to new highs for the year and moved it out of its trading range. The talk during New York Platinum Week was that commodity trading advisor (CTA) trading triggered around 500 koz of short covering.

This document is being supplied to the recipient only, on the basis that the recipient is reasonably believed to be a professional market participant in the precious metals market. It is directed exclusively at entrepreneurs and especially not intended for the use of consumers.

The material contained in this document has no regard to the specific investment objectives, fi nancial situation or particular need of any specifi c recipient or organisation. It is not provided as part of a contractual relationship. It is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment or as advice on the merits of making any investment.

This report has been compiled using information obtained from sources that Heraeus and SFA (Oxford) Ltd (“SFA”) believe to be reliable but which they have not independently verified. Further, the analysis and opinions set out in this document, including any forward-looking statements, constitute a judgment as of the date of the document and are subject to change without notice.

There is no assurance that any forward-looking statements will materialize. Therefore, neither SFA nor Heraeus warrants the accuracy and completeness of the data and analysis contained in this document.

Heraeus and SFA assume no liability for any losses or damages of whatsoever kind, resulting from whatever cause, through the use of or reliance on any information contained in this document. However, in so far as a liability claim exists under German law, Heraeus and SFA shall have unlimited liability for willful or grossly negligent breach of duty.

Unless expressly permitted by law, no part of this document may be reproduced or distributed in any manner without written permission of Heraeus. Heraeus specifi cally prohibits the redistribution of this document, via the internet or otherwise, to non-professional or private investors and neither Heraeus nor SFA accepts any liability whatsoever for the actions of third parties in reliance on this document.

Heraeus Precious Metals - Setting the PGM agenda for the years ahead

to top