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The global platinum market is set to face a substantial deficit of 1 million ounces in 2024, driven by a sharp rise in investment demand and limited mine supply, according to the World Platinum Investment Council (WPIC). China’s growing interest in platinum bars and increased holdings in ETFs are key factors contributing to this shortfall. While recycled supply will see modest growth, falling mine production, especially in South Africa, further exacerbates the deficit. Meanwhile, auto sector demand is climbing, with platinum-for-palladium substitution continuing to rise.

Highlights

Platinum Deficit in 2024: The global platinum market is projected to experience a significant deficit of 1.0 million troy ounces in 2024, double the previously expected shortfall of 476,000 ounces.

Increase in Investment Demand: Investment demand for platinum is forecast to rise by 15%, driven by increased holdings in global physically backed platinum ETFs and purchases of large platinum bars, particularly in China.

China’s Growing Platinum Bar Purchases: Platinum bar purchases in China are expected to surge by 40%, with demand for bars weighing 500g or more increasing to 188,000 ounces in 2024.

Decline in Platinum Mine Supply: Platinum mine supply is projected to decrease by 2% in 2024, largely due to lower production levels in South Africa, the world’s largest producer of the metal.

Rise in Recycled Platinum Supply: Recycled platinum supply is anticipated to grow by 2% in 2024, helping to partially offset the decrease in mine production.

Auto Sector Demand Boost: Demand for platinum in the auto sector, primarily for use in catalytic converters, is expected to rise by 1% to 3.2 million ounces in 2024, driven by hybrid vehicle growth and stricter emissions regulations.

Platinum-for-Palladium Substitution: The substitution of platinum for palladium in catalytic converters is forecast to reach 752,000 ounces in 2024, contributing to the increasing demand for platinum in the auto industry.

Reduction in Above-Ground Platinum Stocks: To cover the deficit, above-ground platinum stocks are expected to fall by 25% in 2024, reaching a four-year low of 3.0 million ounces, which equals approximately four months of global demand.

Conclusion

The platinum market is facing a notable supply-demand imbalance in 2024, driven by robust investment interest and constrained mine supply. China’s surge in bar purchases and ETF inflows are major contributors to the expanding deficit. Although recycled platinum offers some relief, lower mine output and growing auto sector demand are likely to maintain pressure on prices. Above-ground stocks will shrink significantly, potentially pushing platinum prices higher in the coming months as global demand continues to outstrip supply.

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