Zim platinum output seen falling 4%

ZIMBABWEAN platinum supply is seen dipping 4% in the first quarter of 2020 to 438koz despite mining operations having received authorisation to continue limited production over the lockdown period.

Melody Chikono

With the country’s output dependant on South African refineries, logistical challenges remain.On the back of supply-demand dynamics, the global platinum market in 2020 is, however, forecast to shift from a deficit of 168koz in 2019 to a surplus of 247koz.

In 2020, total platinum supply is expected to be 7 197 koz, 10% (-836koz) lower than the average of the past five years, with total platinum
demand at 6 950 koz, down 13% (-1 034koz) on the same basis.

Consequently, the surplus expected for 2020 is 247koz compared to the prior estimate of 119koz.In its Q1 2020 report , World Platinum Investment Council (WPIC) said as the year progresses, market focus will be on the rate of recovery and the extent to which a return to “normal” economic conditions can be achieved.
During the period Zimbabwe posted a modest supply increase, up 1% (+6koz) to 118koz, due to higher output from Unki and Zimplats.

The country enforced a countrywide lockdown on March 30 but has since eased brestriction restrictions to allow mining operations to resume.The WPIC noted that the impact of Covid-19 on the operating environment across much of the mining industry has introduced extreme forecast risk with uncertainty surrounding country lockdowns, workforce social distancing measures and the risk of additional closures due to infections at mine sites has resulted in several producers withdrawing production guidance.

“Zimbabwe posted a modest supply increase, up 1% (+6koz) to 118koz, due to higher output from Unki and Zimplats. The country entered lockdown on March 30th and has since been extended indefinitely,” WPIC said.

“However, all mining operations have received approval to continue working. Russia represented the biggest change year-on-year, with production falling 26% (-54koz) to 150koz. This was a result of the pre-commissioning of the new refining plant at Nornickel, causing a build-up of in-process inventory. The year-on-year impact was compounded as output from Q1 19 benefited from a release of in-process inventory. North American mine supply grew 9% (+8koz) year-on-year primarily due to increased output from Vale.”

Overall, all segments of platinum demand were negatively impacted by the expansive and sudden impact of the Covid-19 pandemic. Demand in Q1 20 fell year-on-year by 38% (-1 000koz) to 1 649koz.

Although there were areas of demand that showed healthy growth, they were unable to offset the overall decline.

Leave a Reply

Your email address will not be published. Required fields are marked *

Top