Abstract
Subject The platinum industry faces an uncertain future. Significance The platinum market has been one of the worst-performing sectors of the mining industry in 2015. Having broken through the 1,000 dollars/ounce level in July, on December 2 it plunged to 829.8 dollars/ounce, a fresh seven-year low. Although investors initially expected the price to rebound after the seasonal summer slowdown, the announcement by the US Environmental Protection Agency that Volkswagen (VW) had breached the Clean Air Act through installation of 'defeat devices' in its diesel vehicles dealt a further blow to the market. Liquidation of 250 kilounces (koz) in platinum exchange traded funds (ETFs) in November has exacerbated the oversupply, just as China's demand fell by 45% year-on-year in October. Impacts Under WTO rules, Russia will have to cancel its export duties on platinum from 2016. Major Hong Kong jewelers, including Chow Tai Fook and Lukfook, report downbeat projections for platinum products in 2016. European fertiliser producers will retrofit plants with platinum-based catalysts, helping cut nitrous oxide emissions. Every 1% decline in the European diesel share will account for a 25 koz drop in platinum demand.
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