Platinum prices are expected to average less than $1,000 an ounce in 2016 for the first time in more than a decade as global growth concerns and demand fallout from the Volkswagen scandal grip the market, a Reuters poll showed on Monday. The poll of 31 analysts and traders returned a median forecast of $904 an ounce for platinum this year, the lowest average since 2005. That is also nearly 20 percent below the forecast returned by a similar survey three months ago.
Platinum lost more than a quarter of its value last year as fears over the health of the global economy hurt industrial commodities, and on worries that the Volkswagen emissions scandal could damage the diesel car sector. It also suffered from a rebound in mine supply last year
after 2014 production had been hit by a five-month strike. The metal's failure to respond more positively to output losses from the strike have suggested that supplies remain ample. "Platinum continues to face a number of challenges, from less responsive jewellery demand to the VW scandal, but lack of supply discipline remains a key concern," Standard Chartered analyst Suki Cooper said.
Next year the metal is expected to recover some lost ground, with the Reuters poll forecasting an average price of $1,040 an ounce in 2017, just below last year's average of $1,051. "Trading below $900 per ounce, we believe platinum prices are unsustainably low in the medium to longer term," Julius Baer analyst Carsten Menke said. Analysts' expectations for average palladium prices this year are 18 percent lower than three months ago. Palladium, last year's biggest faller among the main precious metals with a drop of 29 percent, is expected to average $611 an ounce in 2016.
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