Global platinum market authority forecasts supply deficit of 476 koz for 2024

By Editorial Assistant

The World Platinum Investment Council (WPIC) has released its Platinum Quarterly report for the first quarter of 2024, along with a revised full-year forecast. The report highlights several key trends and projections for the global platinum market in 2024.

Trevor Raymond, CEO of WPIC, noted that “For the second consecutive year, the platinum market will post a meaningful deficit underscored by platinum’s sustained demand and supply vulnerability amidst global economic challenges. While we currently forecast a deficit of 476 koz, it is worth mentioning that a revision to the bar and coin investment series, based on new field research and information, could mean this deficit is potentially deeper. An ongoing review by Metals Focus, the organisation which independently supplies our data, identified the strong growth in platinum bars manufactured and sold in China and has included bars less than 500g in our published data. While 500g and 1kg bars are currently excluded from demand data, sales of these larger bars in 2023 exceeded 100 koz, with signs of strong growth into 2024. Inclusion of these investment bars in demand data would have materially increased the published platinum market deficit.”

Mined platinum supply is expected to decrease by 2% to 5,468 koz in 2024. South African supply is projected to decline by 2% due to infrastructure closures, while Russian output is set to decrease significantly by 9% due to planned maintenance and Western sanctions.

Furthermore, above ground stocks are forecasted to decline for the second year in a row, hitting a four-year low of 3,620 koz.

Global bar and coin investment dropped in Q1’24, but net platinum investment is expected to remain positive for the second consecutive year. Bar and coin demand in North America is expected to exceed pre-pandemic levels, while China’s retail investment in platinum is projected to exhibit double-digit growth. Platinum ETF holdings are projected to decrease, mainly due to the discouragement of investment in non-yielding assets caused by high interest rates. The change in Stocks Held by Exchanges is expected to see an increase of 38%.

For 2024, it is expected that automotive platinum demand will grow by 2% to 3,269 koz. This growth is driven by various factors, including the slowdown in consumer demand for battery electric vehicles, continued growth in heavy-duty and hybrid vehicle numbers, stricter emissions legislation, and an increase in platinum-for-palladium substitution, which is forecast to reach 742 koz this year.

Platinum demand in the automotive sector has reached a seven-year high in Q1’24, with a total of 832 koz. This growth can be attributed to increasing vehicle production and a greater share of hybrid vehicles. The use of platinum-rich trimetallic catalysts, particularly in North America, has also contributed to the rise in demand, which saw a 13% year-on-year increase. It is projected that recycling supply will increase by 5% in 2024, as spent autocatalyst supplies begin to recover.

Global platinum jewellery demand experienced a 5% increase in Q1’24, reaching 486 koz, notably, Indian platinum jewellery fabrication saw a substantial jump of 53% to 59 koz. This growth was fueled by increased exports to the US and UAE, along with increased promotion of men’s jewellery and new store openings. Europe is projected to see a 2% growth in demand, while North America is expected to show a modest gain. The Japanese market is being supported by the bridal market, and a slight improvement is anticipated in the depressed Chinese market. Overall, global jewellery demand is projected to rise by 6% to reach 1,978 koz in 2024.

While industrial demand is expected to decline by 15% in 2024 compared to record highs in 2023, it will still remain 17% above the pre-COVID average. Chemical demand fell by 52% in Q1’24, and further decline is projected in 2024. Glass demand, on the other hand, increased in Q1’24 but is expected to fall in the full year. The medical sector and hydrogen-based applications are expected to experience growth in 2024, while demand from the petroleum, electrical, and other industrial sectors will likely remain similar to 2023 levels.