The World Platinum Investment Council (WPIC) published a new revised platinum deficit for 2023 – a number expected to be 983,000 oz. – as demand grew 28% and supply dropped 1% year-on-year. The new deficit number is 77% higher than the one given three months ago by the WPIC.
Total supply is now expected to fall 1% below the weak 2022 level to 7.2 million oz. and annual demand growth to grow by 28% to 8.2 million oz.
Global platinum demand in the first quarter of 2023 jumped 28% to more than 441,000 oz. as an upswing in investment demand added to strong demand growth momentum in the automotive and industrial sectors. Combined with lower supply of refined platinum production in the quarter (down 8% year-on-year to less than 96,000 oz.), as well as reduced automotive catalyst recycling (down 15% to below 52,000 oz.) and jewellery recycling (down 3% to less than 3,000 oz.), this led to a market deficit of 392,000 oz. – the first quarterly deficit since the second quarter of 2021.
The first quarter this year saw a jump in investment demand driven by global uncertainty, strong demand growth, and concerns about risks to mine supply. Both physical platinum and net ETFs (exchange-traded funds) investments grew, and the tend is expected to continue though the year.
Industrial platinum demand grew by 8% in the first quarter driven by growth in the chemical sector of 108%. Glass production is China is expected to more than offset closures in Japan. Spurred by increased demand in the medical and other industrial segments, 2023 is on track to be a record year for industrial uses, growing 17% year-on-year to 2.6 million oz.
Automotive demand for platinum rose 9% in the first quarter 2023, and it is expected to rise by 12% for the whole year to 3.3 million oz. The growth will be fueled by growing heavy duty vehicle production, tighter emissions legislation, and the use of platinum and palladium in gasoline after-treatment systems.
Total mine supply continues to struggle, declining 8% in the first quarter and 11% from the fourth quarter 2022, as gains from Russia failed to offset reduced output from South Africa. Mine platinum supply is forecast to fall by a modest 1% to 5.5 million oz. in 2023.
The recycled platinum supply fell 12% to 413,000 oz. in the first quarter 2023, due to reduced volumes of end-of-life vehicles as a result of fewer new vehicles being sold. Full year platinum recycling supply is expected to fall by 1% to 1.7 million oz.
The one bright spot for platinum demand will be its use in electrolysers producing green hydrogen. Hydrogen-related platinum demand is expected to grow substantially in the medium term.
Read more about the outlook for platinum at www.PlatinumInvestment.com.
February 26, 2024
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