Industrial, Jewelry Demand Bolster Platinum ETFs

November 12th at 3:24pm by Max Chen

Platinum prices could strengthen as the market experiences a growing disparity between supply and increased global demand in autocatalyts, jewelry and exchange traded fund investments.

Johnson Matthey, a precious metals refiner, estimates that gross demand for platinum could hit a record 8.42 million ounces this year, or up 4.8% year-over-year, due to strong industrial and South African investment demand, reports Neil Hume for Financial Times.

Platinum is primarily used in catalytic converters to reduce harmful emissions from combustible engines and is also used in jewelry.

Alison Cowley, principal market analyst at JM, points out that sales in Europe could rise due to new diesel emissions standards. Additionally, the emerging middle class in China could also fuel demand.

“The conditions are in place for further growth in the Chinese market,” Cowley said in the article. [China’s Desire for Bling Could Lift Platinum ETF]

Additionally, JM predicts investment demand could increase 68% to a record 750,000 ounces this year.

The NewPlat ETF (NGPLTJ.J), which provides exposure to platinum bullion price movements as tracked by the South African Rand price of platinum, is a physically backed fund that holds about 774,300 ounces of platinum. [South Africa-Listed Platinum ETF is Largest in the World]

In comparison, the ETFS Physical Platinum Shares (NYSEArca: PPLT), a physically backed U.S.-listed platinum ETF, holds about 552,080 ounces of platinum.

Additionally, the ETFS Physical PM Basket (NYSEArca: GLTR) and the ETFS Physical White Metals Basket Share (NYSEArca: WITE) provide exposure to a basket of various precious metals. WITE holds the “white metals” silver, platinum and palladium; and GLTR holds a basket of silver, platinum, palladium and gold.

For more information on platinum, visit our platinum category.