Johnson Matthey's Platinum 2006 Interim Review has suggested that the platinum deficit is set to reduce over 2006.

According to the report, global demand for platinum in 2006 is expected to grow by five per cent over the course of 2006, reaching a record 7.02 million ounces.

The increase is believed to be driven by the increasing importance of green technology in the automotive industry, with demand for platinum in catalysts increasing substantially over the course of the year.

Production of diesel vehicles has also increased this year, which has had an important impact in increasing demand for platinum.

In 2007, the report predicts that the platinum market will again be close to balance, as autocatalysts again absorbing much of the expansion in primary output.

However, the jewellery sector will again depend on the price of platinum, as fluctuations in price will make a significant difference to the cost of platinum items.

The report predicts that palladium supplies are likely to exceed demand by the end of 2006. Lower purchases in the jewellery sector are largely to blame, with increases in the autocatalyst industry unable to offset that slowing demand.

A 310,000 ounce drop in demand for palladium in the jewellery sector will result in demand exceeding supplies by 1.63 million ounces in 2006.

Ÿ Adfero Ltd