Platinum output dives 13% in 2012

Platinum production sank last year by 13 percent, hitting a 12-year low due to unrest in key producer South Africa, but output is forecast to recover slightly in 2013, industrials group Johnson Matthey said on Monday.

Platinum output slumped in 2012 to strike 5.64 million ounces, Johnson Matthey said in its closely-watched annual market review. That was the lowest level in 12 years and compared with 6.48 million ounces in 2011.

Total platinum demand dipped 0.6 percent to 8.05 million ounces last year, while recycling of platinum stood at 2.03 million tonnes.

That gave an overall deficit of 375,000 ounces for 2012.

"The platinum market was in deficit by 375,000 ounces in 2012 due to a steep decline in output from South Africa," Johnson Matthey said in the report.

And platinum shipments from South African producers tumbled 16 percent to 4.10 million ounces last year.

"At least 750,000 ounces of production (in South Africa) were lost to illegal strikes, safety stoppages and closure of some marginal mining operations," the report added.

In addition, Johnson Matthey predicted that demand would outstrip supply this year, but added that supply would be "slightly higher".

Johnson Matthey also forecast that platinum prices would average $1,570 per ounce over the next six months.

That compared with about $1,480 per ounce in Monday afternoon deals on the London Platinum and Palladium Market.

Meanwhile, palladium was also forecast to remain in deficit this year, due to falling Russian stock sales and struggling Russian and South African output.

The palladium market registered a deficit of 1.07 million ounces in 2012, switching from a surplus in 2011 thanks to record demand for autocatalysts and solid investment demand.

Both palladium and platinum are involved in the production of catalytic converters. They are also used for electronics, dentistry equipment, chemical processing and jewellery.