World Platinum Investment Council forecasts continued supply deficit
A new report from the World Platinum Investment Council (WPIC) is forecasting the precious metal to remain in deficit throughout 2024.
Platinum is attracting new global headlines following BHP’s recent multi-billion-dollar takeover bid for Anglo American, one of the world’s leading producers of the precious metal.
In 2023, Anglo American produced 1.75 million ounces from its South African operations.
According to the latest WPIC figures, the platinum market recorded a deficit of 369,000oz in the first quarter of 2024, with a deficit of 476,000oz forecast for the full year—58,000oz more than WPIC forecast in its Q4 2023 Platinum Quarterly, published in March 2024.
This follows an 851,000oz deficit in 2023.
Supply risks
According to the latest report, supply risks remain a major theme in 2024 with total mine supply – mainly due to lower output from South Africa and Russia – forecast to decrease by 3% year-on-year (YoY).
Refined mine production rose 4% YoY in the first quarter to 1.235Moz, driven primarily by a 5% YoY rise in South African output.
For the full year 2024, however, total mined platinum supply is forecast to decrease by 2% to 5.468Moz.
South African supply is projected to decline by 2% due to cost-driven infrastructure closures offsetting increases from some expansion projects, while Russian output is set to decrease by 9% to a multi-decade low due to planned maintenance and the impact of Western sanctions on business operations.
Recycling supply in Q1 2024 was stable versus a year earlier, potentially indicating the first green shoots of the recovery forecast through 2024, although there are risks to the pace of the recovery.
Demand fluctuating
Demand for platinum in the automotive market has reached the highest levels since 2017.
Global platinum demand in the first quarter rose quarter-on-quarter to 1.994Moz, as an upswing in jewellery demand added to the steady growth in the automotive sector.
While total demand is expected to decline by 5% in 2024, it follows a record year for industrial demand in 2023 and is also the result of a weaker investment outlook for bars and coins in the US and Japan and expected exchange-traded fund disinvestment in a higher-for-longer interest rate environment.
Total supply for the full year is expected to remain flat at the weak levels of 2023, totalling 7.111Moz, with an improvement in recycled supply (up 5%, 85,000 ounces YoY) offset by a 3% decrease in mined supply (down 147,000oz to 5.468Moz).