Platinum

The platinum market ended 2010 with a surplus of around 9 tonnes, after gross demand rose just over 10% to around 235 tonnes. Demand was boosted in 2010 by improved economic conditions, which led to a strong recovery in several industrial sectors, including Chemicals. Recycling in the autocatast, jewellery and electrical sectors increased 30% in 2010 and with supplies remaining relatively flat at around 187 tonnes; net demand increased 6% to 178 tonnes, giving rise to the small surplus of 9 tonnes.

Global autocatalyst demand for platinum rose by 37% to 93 tonnes as vehicle production recovered from the de-stocking that occurred in 2009. The major demand for platinum comes from light duty diesel vehicles, which, during the various scrappage schemes during the recession lost significant market share to smaller gasoline vehicles. The ending of these schemes and a return to fleet purchases increased platinum demand by 44 tonnes over the year.

Purchases of platinum from the industrial sector were greatly improved in 2010 across virtually all industries. The sector showing the largest growth last year was the glass sector. This was driven by the opening of new LCD manufacturing facilities in the Asia region. Electrical demand picked up significantly with sales of electronic goods benefiting from the improved economic situation. Demand from bulk chemicals such as nitric acid, paraxylene and purified silicones all helped increase chemical demand to 14 tonnes and industrial demand as a whole to 54 tonnes.

The big loser in terms of platinum demand was the jewellery sector with a drop in demand of 14% to 75 tonnes as both retailers and consumers felt the sharp increase in price over 2010. Higher prices also increased recycling levels by 30% over the year. Investment demand, which has become increasingly important in the platinum and palladium markets, was also affected by higher prices as profit taking became popular in the more mature fund markets.

Palladium

The palladium market ended 2010 in a very small surplus of around 1.5 tonnes, with strong autocatalyst and industrial demand again driving demand. As with platinum recycling increased markedly as the price increased and supplies remained flat compared to 2009.

Palladium demand from the autocatalyst sector is driven almost entirely by gasoline vehicles. Recovery in all regions took place in 2010, with China leading the way. Gross demand increased by 27% to 160 tonnes over the year.

Industrial demand for palladium was led by the electronics sector with a large increase in demand for multi layer ceramic capacitors (MLCCs), which are used in a wide range of electronic devices. Chemical demand recovered strongly in line with the economic recovery. One of the largest uses of palladium in the chemical sector is as a catalyst for the production of purified terephthalic acid, a key component of PET, which is in turn used widely for plastics and textile production.

Palladium investment demand remained strong during 2010 rising to just over 20 tonnes by the year end. Jewellery demand was hit hard by the rising prices and fell by almost 20% to just under 20 tonnes, most of this decline being in China.

Rhodium

The rhodium market tightened substantially during 2010 ending the year in a modest surplus of around 2.5 tonnes, down from 7.4 tonnes the previous year. Gross demand increased by just over 20% to around 27 tonnes, due to increased demand from the autocatalyst and industrial sectors. Unlike platinum and palladium, rhodium supplies decreased by 7% in 2010, helping to tighten the balance.