Platinum and Palladium Outlook

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London-based Precious Metals Weekly’s Metals Focus has just published Platinum and Palladium Focus 2020, its flagship annual report on the PGMs market. Metals Focus Ltd. is one of the world’s leading independent precious metals consultancies.

During the past month platinum prices have risen from about US$760/oz to US$832/oz. Palladium prices have been volatile. The price on May 20 was US$2,018/oz.

The report remarked that the COVID-19 crisis has had profound implications for platinum group metals. Both supply and demand have been severely affected by widespread lockdowns which had a massive impact on the world economy. “Our current projections for this year see platinum in a smaller surplus than 2019, of 247Koz, or 7.7 tonnes,” noted Wilma Swarts, Metals Focus’ Head of PGMs.

Metals Focus forecasts lockdowns and other disruptions will lead to supply losses of 13% or 1.1Moz (33t) year over year in 2020. This compares to demand “only” falling by 7% or around 500Koz (16t). Platinum automotive and jewellery offtake are projected to fall by 14% and 15% respectively in 2020, but higher physical investment and glass demand will mitigate these losses.

As far as prices are concerned, Metals Focus is cautiously optimistic about platinum’s price outlook, as the metal benefits from stronger gold prices. Still, its fundamentals will remain a drag, limiting its upside which will make it prone to corrections and ultimately resulting in a full year average for 2020 of US$765/oz, 11% lower year over year.

Platinum Metals Focus forecasts the platinum price will rise in the months ahead, riding on gold’s coat-tails, but its average for 2020 will still end up 11% lower at US$765/oz, reflecting an ongoing market surplus.

“The impact of the crisis on palladium’s overall balance will be more pronounced,” Wilma added. Metals Focus forecasts total supply to decrease by a modest 7%, as a smaller share of its mine capacity than platinum’s has been affected by lockdowns.

Meanwhile, the collapse of light vehicle sales this year will translate into a sharp 11% decline in total palladium fabrication. The market is still forecast to remain in a deficit, but at 124koz (3.9t) this is a fraction of the shortages seen in recent years and close to a balanced market. That said, in the longer term Metals Focus remains bullish for palladium. Indeed, it expects market tightness to re-emerge in the second half of the year.

For palladium, Metals Focus maintains a bullish price view for the second half of 2020. As physical demand improves, a return to tighter conditions could see palladium prices rally to levels not far off February’s all-time-high, resulting in a US$2,275/oz average which is 48% higher year over year.

The complete report is available for purchase at

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