The platinum market tightens more than it was expected, as the sector is likely to witness it's fifth year of a supply deficit. A lower than anticipated recycling rates were playing a part in its expectation of a wider deficit this year, a situation that should help to support the price of the metal.
Precious metal prices fell almost by 50% since it's peak in 2008 at almost $2,300 per troy ounce. Most supply comes from South Africa, where the largest miners endured a five-month labour strike two years ago that nonetheless failed to pep up prices.
Supply from mines is expected to decline by 3% yearly. Almost a quarter of the total supply is expected to come from recycling of previously mined platinum from scrapped cars and jewelry. Analysts reported that car demand may not make leaps and bounds this year, but sales of jewelry in India remained strong, with increased demand increased by 25% yoy. In 2016, the price of the metal rose 25 percent, leading to an share increase of Anglo American and Lonmin.
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