Platinum Market Faces Largest Shortfall in a Decade, According to Johnson Matthey Report
The platinum market is poised for its most significant supply deficit in ten years, with projections indicating a shortfall of 598,000 ounces in 2024, up from 518,000 ounces last year. This analysis comes from Johnson Matthey, a leading authority in autocatalyst manufacturing, in a recent report detailing the dynamics of the platinum group metals (PGM) market, which includes platinum, palladium, and rhodium.
The forecast suggests that as shipments from Russia normalize following an unusually high output last year, the global supply of platinum will tighten further. This reduction is set to occur amidst steady industrial demand, particularly for uses in autocatalysts—a critical component in reducing vehicle emissions. Platinum is also widely utilized in other industries, as well as in jewelry and as an investment.
In detail, automotive sector consumption of platinum is expected to decrease slightly by 1.3% in 2024, while palladium usage by automakers is anticipated to drop about 7%, leading to a reduced overall demand of 9.73 million ounces. This shift contributes to a decrease in the palladium market deficit to 358,000 ounces, down significantly from 1.02 million ounces in 2023.
Rhodium is also seeing a downturn in auto consumption by about 6%, with total demand expected to drop 4% to 1.06 million ounces. The rhodium market will likely face a supply shortage of 65,000 ounces, a decrease from last year's 125,000 ounces deficit.
Rupen Raithatha, the market research director at Johnson Matthey, noted that automotive and industrial users had overbought metals during the 2020-2022 period to hedge against price volatility and supply risks. Since then, these sectors have been depleting their excess PGM inventories, with some even reselling their stock back into the market.
Market prices reflect these trends, with palladium currently trading at around $950 an ounce, slightly lower than platinum at $960. Rhodium has seen a significant price drop, now trading around $4,700 an ounce, which is about 84% below its peak in March 2021.
