World Platinum Investment Council Reports Continued Deficit and High Demand in Platinum Market
The World Platinum Investment Council (WPIC) has released its latest Platinum Quarterly report for Q1 2024, forecasting another year of market deficit and sustained demand for platinum, particularly from the automotive sector. This report underscores significant trends in supply and demand dynamics across various sectors impacting the platinum market.
Total platinum supply in Q1 2024 was the second lowest recorded, with a full-year forecast also predicting near-record lows. Mining and recycling challenges continue, with a projected annual decrease in mined supply and a slight recovery in recycled platinum. Global mining production is grappling with infrastructure issues and geopolitical tensions affecting output, particularly in Russia and South Africa.
Automotive demand for platinum reached a seven-year high in Q1 2024, driven by increased production of hybrid vehicles and stricter emissions regulations, which also promote the substitution of platinum for palladium in catalysts. This trend is expected to continue, supporting robust demand throughout the year. Jewelry demand saw a significant rise, particularly in India, where a 53% increase was recorded due to expanding market penetration and promotional activities.
Industrial demand, while down from last year's peak, remains well above pre-COVID levels, thanks to ongoing applications in glass manufacturing and chemical sectors. Investment demand for platinum is forecasted to remain positive for the second consecutive year, bolstered by strong bar and coin demand in China and stable interest in North America. However, high interest rates pose a challenge, likely affecting investments in non-yielding assets like platinum ETFs.
The WPIC notes that while the current deficit stands at 476 koz, adjustments in investment demand calculations could deepen this deficit further. The ongoing shift towards electrification in vehicles and the increasing role of platinum in the hydrogen economy are expected to be key drivers of demand.
Trevor Raymond, CEO of the WPIC, emphasized the impact of global economic challenges on platinum supply and demand. He highlighted the strategic importance of platinum in global decarbonization efforts and its burgeoning role in hydrogen energy technologies, which are gaining traction thanks to substantial governmental incentives and subsidies.
