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Platinum deficit seen widening in 2014 -Johnson Matthey

Palladium set for largest deficit since at least 1980.

LONDON – The platinum market is expected to post a deficit of 1.218 million ounces this year, a report from Johnson Matthey showed on Tuesday, the largest shortfall since it began compiling data in 1975.

South Africa, currently facing its longest and costliest platinum miners’ strike ever, is expected to supply quarter of a million fewer ounces of metal in 2014 than last year – some 3.953 million ounces against 4.209 million in 2013.

With Russian output seen dipping by 15,000 ounces, total mined supply of platinum is expected to fall 267,000 ounces to 5.562 million ounces.

The two countries between them account for nearly 85% of annual mined supply of the metal, data from the British company, a major refiner of precious metals, showed.

The fall will be partly offset by a 190,000 ounce rise in recycling of the metal.

Autocatalyst demand, the largest single segment of consumption, is expected to rise 8.5% to 3.381 million ounces, its highest since 2008, while the next largest segment, jewellery, is seen rising by 5.3%.

Overall, net of recycling, demand is seen edging up to 6.78 million ounces from 6.769 million ounces in 2013.

The deficit in the market for sister metal palladium is set to widen to 1.612 million ounces, its largest in at least 34 years, largely driven by a rise in autocatalyst and investment demand.

Investment in the metal is likely to reach 965,000 ounces this year, JM said, against disinvestment last year of 8,000 ounces. Autocatalyst demand is set to reach 7.129 million ounces, up 221,000 ounces and its highest since at least 1980.

Overall demand is seen rising nearly 13% to 7.789 million ounces, while supply eases to 6.177 million ounces from 6.532 million ounces.

South African supply is seen falling 7% to 2.266 million ounces, while Russian output is expected to drop 5% to 2.51 million ounces.

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