Platinum market faces record deficit, WPIC says

Platinum is used by automakers, who embed it in vehicle exhausts to neutralize harmful emissions. Stock image.

Platinum will register a 2.2% bigger supply deficit than previously expected for 2023 at a record 1 million troy ounces, driven by strong demand and flat supply, the World Platinum Investment Council (WPIC) said on Wednesday.

Demand for platinum, which is used in catalytic converters to reduce harmful emissions from vehicle exhaust systems among other applications from jewellery to glassmaking, is on track to grow 27% to 8.2 million troy ounces in 2023, the WPIC said in a quarterly report.

Rising vehicle production, with use of more metal per vehicle and substitution by automakers of palladium for cheaper platinum , is helping to drive demand.

Supply, meanwhile, is expected to remain at last year’s 7.2 million ounces, partly owing to ongoing electricity shortages in major producer South Africa.

That will leave the market undersupplied by 1 million troy ounces this year, said the WPIC, which three months earlier predicted a deficit of 983,000 ounces.

The WPIC expects automotive and industrial consumption to underpin total demand growth for platinum in 2024 and availability of above-ground stocks to decline.

“By the end of 2023, above-ground stocks will represent only five months of annual demand, with most of these stocks held in China and not readily able to be exported to meet global shortfalls, increasing concerns over metal availability,” it said.

In the second quarter, the platinum market was undersupplied by 348,000 ounces to chalk up consecutive quarters of deficit for the first time since the second half of 2020.

Platinum supply/demand (koz)

20222023 forecast23/22 forecast % changeQ2 2022Q1 2023Q2 2023
Refined Production:5,5225,5751%1,5301,1771,464
– South Africa3,9153,9190%1,1297631,028
– Zimbabwe4805025%124116126
– North America2632817%647174
– Russia6636671%161180190
– Other2012052%524847
Change in producer inventory+43+30-2+24+14
Total Mining Supply5,5655,6051%1,5281,2011,478
– Autocatalyst1,2501,180-6%281262244
– Jewellery3723700%929584
– Industrial68692%171717
Total Supply7,2567,2240%1,9181,5751,823
– Chemical67675812%126251235
– Petroleum193171-11%484242
– Electrical10697-8%272324
– Glass50575650%20289170
– Medical2782873%697171
– Other5735984%149147154
– Change in bars, coins22532645%7210026
– Change in ETF holdings-55860N/A-11240155
– Change in stocks held by exchanges-3070N/A-12329-27
Total Demand6,4918,23027%1,6522,1032,171
Above-ground Stocks4,6083,603-22%
Source: World Platinum Investment Council, Platinum Quarterly Q2 2023

(By Polina Devitt; Editing by David Goodman)


Your email address will not be published. Required fields are marked *