Unraveling the Dynamics: Platinum Supply and Demand in 2022 and Beyond

Exploring Forecasts, Shifting Trends, and Global Implications

The platinum market is characterized by its intricate dance between supply and demand, intricately balancing industrial, automotive, and investment sectors. The Platinum Quarterly Q2 2023 report by the World Platinum Investment Council provides a detailed snapshot of the current landscape and projections for 2023, revealing fascinating insights into the dynamics shaping the platinum market.

Supply Landscape

Refined Production:

In 2022, refined platinum production reached 5,522 koz, with a marginal 1% forecasted increase to 5,575 koz in 2023. South Africa, a significant contributor to global platinum production, is expected to maintain stability with a slight increase. Meanwhile, Zimbabwe, North America, Russia, and other regions collectively contribute to the overall growth.

Change in Producer Inventory:

A notable change in producer inventory reflects the adaptability of the industry, with a decrease of 13 koz expected in 2023. This change hints at the strategic management of platinum resources to align with market demands.

Total Mining Supply:

Total mining supply is anticipated to experience a 1% increase from 5,565 koz in 2022 to 5,605 koz in 2023. The industry's resilience is evident in its ability to navigate challenges and sustain the supply chain.

Recycling:

Platinum recycling faces a modest downturn of 4%, from 1,691 koz in 2022 to a forecasted 1,620 koz in 2023. Despite this decrease, recycling remains a crucial component in meeting demand and ensuring resource sustainability.

Demand Dynamics

Automotive:

The automotive sector emerges as a robust driver of demand, projecting a substantial 13% increase from 2,902 koz in 2022 to 3,283 koz in 2023. This surge is indicative of the growing importance of platinum in catalytic converters and green automotive technologies.

Industrial:

The industrial sector anticipates a 14% surge in demand, with applications in chemical, petroleum, electrical, glass, medical, and other industries. This diversification underscores platinum's versatility and its indispensable role in various industrial processes.

Investment:

The investment landscape is marked by notable shifts, with a noteworthy increase in demand. The change in bars, coins, ETF holdings, and stocks held by exchanges collectively reflects a dynamic investment environment, potentially influenced by economic uncertainties and the desire for tangible assets.

Balancing Act: Supply, Demand, and Beyond

The forecast for 2023 predicts a 27% increase in total platinum demand, reaching 8,230 koz. This surge in demand, coupled with a nuanced supply landscape, leads to a complex balancing act. The industry anticipates a deficit, with a balance of -1,005 koz.

Looking Ahead

The platinum market's resilience and adaptability are evident in its response to evolving global dynamics. As the industry navigates through changes in supply, demand, and investment, stakeholders must remain vigilant to harness opportunities and mitigate challenges. The intricate dance of platinum in the global market continues, promising a future marked by innovation, sustainability, and economic impact.

Referencing:

Source: World Platinum Investment Council, Platinum Quarterly Q2 2023 Polina Devitt; David Goodman