Global platinum market expected to be in deficit in 2023 due to rising demand and supply constraints: report

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(Kitco News) – In its quarterly report released today, the World Platinum Investment Council (WPIC) said the global platinum market is forecast to be in deficit by 303 koz by 2023 as global platinum demand is expected to increase. by 19% (to 7,770 koz) while supply will increase by only 2% (to 7,466 koz).

WPIC noted that supply constraints, combined with increased demand for bars and coins, have seen the 2022 market surplus forecast revised downward by 17% (-170 koz) to 804 koz, adding that the deep swing in market balances between the 2022 surplus and the 2023 deficit is forecast to be more than 1.1 Moz.

Demand for automotive platinum rose 25% yoy (+143 koz) in Q3 2022, according to the report, in a very weak Q3 2021, largely driven by a 27% increase in vehicle production. light as supply. Chain challenges eased.

“A combination of higher production numbers for passenger cars, stricter emissions legislation for heavy-duty vehicles in China and India, as well as an increasing substitution of platinum for palladium, will lead to an expected increase of 12% (+329 koz) in platinum demand this year, to 2,964 koz. the analysts said.

Importantly, WPIC noted that automotive demand in 2023 is expected to increase at a similar pace to 2022, up 11% (+324 koz) to 3,288 koz.

Platinum jewelry demand in 2022 is forecast to remain flat year-over-year at 1,953 koz, with growth in Europe, North America, India and Japan not fully offsetting weakness in China, however an improvement in projected demand at the beginning of the year. By 2023, jewelry demand is expected to hold steady at 1954 koz, WPIC said.

WPIC noted that 2022 will be the third strongest year on record for industrial platinum demand, with 2,110 koz of demand. This trend is anticipated to continue into 2023, which is forecast to be the second strongest year of industrial demand on record, rising 10% to 2316 koz, with a notable increase in demand from the glass industry.

Investment demand for platinum is expected to rise significantly in 2023, the report authors said, as demand for bars and coins is forecast to rise 49% (+167 koz) to 507 koz, a three-year high, as manufacturers in the northern US and Europe allocate more capacity to platinum on lower demand for gold and silver, and net divestment in Japan shifts to net investment.

Meanwhile, outflows from foreign exchange stores (-20 koz) and liquidations of ETF holdings (-275 koz) are expected to decline, resulting in a net investment of 212 koz in 2023.

Trevor Raymond, chief executive of the World Platinum Investment Council, commented: “Sizable economic headwinds that have persisted through 2022 are expected to continue into 2023, although the platinum market is forecast to be in deficit after two consecutive years of significant surpluses. This reflects a supply that remains well below pre-2019 pandemic levels and growing demand, despite unfavorable economic prospects.

“Platinum’s resilience reflects growing automotive demand primarily due to increased substitution and higher loads, and already committed industrial capacity additions. This puts platinum in a somewhat unique position against other commodities where demand is forecast to continue to grow, despite the prospect of a recession.”

The World Platinum Investment Council is a global market authority on physical platinum investments, formed to meet the growing investor demand for objective and reliable platinum market intelligence. WPIC’s mission is to stimulate global investor demand for physical platinum through practical insights and targeted product development.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a request to make any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for loss and/or damage arising from the use of this publication.

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