The platinum market saw a deficit in 2022, with global demand remaining flat at 7.4 million ounces and global supply forecast to decline by 11% to 7.3 million ounces, according to Wilma Swarts, Director of PGMs at Metals Focus. The main factors driving this market imbalance were weaker supply rather than stronger demand, with production challenges and operational difficulties leading to a decline in refined platinum production by 11% in Q3 2022.
The World Platinum Investment Council (WPIC) report states that maintenance and power supply challenges in South Africa, which supplies over 70% of mined platinum, resulted in an 18% decline in output during the quarter. The rebuilding of Anglo American Platinum’s Polokwane smelter and flooding at Sibanye-Stillwater’s Montana mine were also major factors in the production decline.
Additionally, the recycling segment contracted by 13%, or 61,000 ounces, in 2022. Fewer scrapped autocatalysts and less Chinese jewellery being sold back made up the largest portion of the shrinking segment. Both mining and recycling constraints were expected to continue through the end of 2022 and into 2023, with total supply for 2022 forecast to be down 10% on 2021 at 7,306 koz, the WPIC’s forecast reads.
Automotive demand for platinum began to recover during the second half of 2022, with the substitution of platinum in place of palladium in light-duty vehicles pushing demand in the light-duty segment higher. However, overall weak investment demand for platinum outweighed the strong industrial use.
Platinum is prized for its ability to reduce vehicle emissions, with many automakers choosing to increase platinum loadings or replace pricey palladium loadings with platinum due to tighter emissions standards. This has led to an uptick in demand for platinum in the automotive sector, with demand from the auto sector up 25% year on year. However, the production challenges and market deficit in platinum may make it difficult for manufacturers to source enough of the metal to meet this growing demand, potentially leading to delays in producing vehicles that meet the new emissions standards. 
