Despite a surge in demand for platinum group metals (PGMs), the global supply of this crucial metal, essential for the automotive industry, is anticipated to decline this year. This downturn is partially attributed to mining companies, including prominent South African firms, shuttering unprofitable shafts and downsizing their workforce.
South Africa, together with Zimbabwe, boasts the world’s most extensive platinum reserves. These countries have seen significant investments from major miners like Anglo Platinum, Impala Platinum, and Sibanye-Stillwater, along with other smaller entities.
However, the outlook for the global platinum market has dimmed, with prices consistently declining, dampening investment and production enthusiasm. According to the World Platinum Investment Council (WPIC), the global mine supply of platinum in 2023 experienced a modest 1% increase to 5.6 million ounces, bouncing back from the previous year’s reduced levels.
For this year, a 3% reduction in global platinum mine supply is forecasted, dropping to 5.4 million ounces. Both Sibanye-Stillwater and Anglo Platinum have declared cost reduction measures in their PGM operations, including production cuts.
Trevor Raymond, CEO of the WPIC, noted, “The sustainability of mine supply is being challenged by the substantial drop in the prices of palladium and rhodium, with some plans for supply rationalization already disclosed. The potential short-term impact on mine supply remains a question, but any diminution also critically limits any immediate supply reaction to spikes in demand or platinum prices.”
This situation unfolds as the global platinum market entered a significant deficit of 878,000 ounces in 2023. Total demand soared by 25% year-on-year to 8 million ounces, contrasted with a total supply of 7.1 million ounces, marking the second-lowest figure since 2013.
Demand from the automotive sector for PGMs in 2023 rose by 16% to 3.2 million ounces, driven by increased vehicle production, a higher share of hybrid vehicles, and stricter emissions standards for light and heavy-duty vehicles, especially in China.Continued demand growth for PGMs in the automotive sector is expected to endure through this year. 
