Platinum buyers may shun Russian metal when contracts renewed

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Platinum supply concerns could re-emerge as buyers seek to avoid Russian metal, according to the World Platinum Investment Council.

While companies have continued to source platinum from Russia following its invasion of Ukraine, that could change when supply contracts are renewed, WPIC said in its quarterly report. Russia is a significant supplier of both platinum and palladium, which are mostly used to cut emissions from gasoline and diesel vehicles.

Both metals spiked earlier in the year over fears that Russian supply could be cut off. The country contributes about 11% of world output, making it the second-biggest producer after South Africa. Prices have since cooled on the deteriorating global economic outlook, which may lead to less demand from automakers.

WPIC sees platinum supply outstripping demand by 974,000 ounces in 2022, a slightly smaller surplus than the year before. Investors are expected to remain net-sellers of the metal, while demand from industrial users is expected to cool.

More figures from WPIC report:

  • Automotive demand for platinum is forecast to rise 14% in 2022 from the year before to 3 million ounces as the semiconductor shortage eases
  • Platinum jewelry purchases will remain steady at 2 million ounces
  • Industrial demand will fall 15% year-on-year to 2.1 million ounces
  • Investors should sell 565,000 ounces of the metal
  • Total supply is forecast to contract 8% to 7.5 million ounces, driven by a slide in mine production

(By Eddie Spence)

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