“It is possible that the recent weakness in platinum prices – prices were 9% m/m lower in rand terms and 8% m/m lower in US dollar terms on average during the month – is starting to weigh on miners’ profitability, incentivising them to cut output,” according to a Capital Economics note seen in Mining.com.ETFS Physical Platinum Shares (NYSEArca: PPLT)
Earlier this year, data from the the World Platinum Investment Council showed South Africa, the largest producer of platinum and home to about 80% of the world’s proven platinum reserves, has experienced a precipitous fall in platinum investments from an annual $3 billion in 2008 to $1 billion in 2015, reports Emiko Terazono for the Financial Times.
“Output is now only down 1.2% year-to-date, which might not be sufficient to rebalance the market. Above-ground stocks remain abundant and demand might not grow as strongly once the effects of China’s stimulus in the first half of this year start fading,” according to the Capital Economics note seen on Mining.com.
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