Weaker supply will drive platinum deficit higher than expected in 2024, WPIC says By Reuters

Written by Paulina Devitt

LONDON (Reuters) – The global platinum deficit in 2024 will be deeper than previously expected due to lower supplies from mines in South Africa and Russia, the World Platinum Investment Council said on Monday.

The 2024 deficit of 476,000 ounces will be smaller than the 851,000 ounces in 2023 due to a 5% drop in demand, the WPIC, whose members are major Western platinum producers, said in a quarterly report. It had previously expected that the shortage in 2024 would reach 418 thousand ounces.

“We have a deficit for the second year in a row, which will be equivalent to 6% of total demand in 2024,” said Edward Sterk, head of research at WPIC. “The focus is on supply, which was second lowest in our time series in the first quarter, and the full year is also expected to be near the record low of 2020.”

The restructuring has already been announced and production will increase more slowly than previously expected amid falling palladium and rhodium prices, which will cut production from South African mines by 2% this year. Supplies from Russia, which plans to maintain smelters in 2024 and continues to deal with damage from Western sanctions, will fall by 9% to their lowest level in several decades.

Meanwhile, demand for platinum, used in catalytic converters to reduce harmful emissions from automobile exhaust systems among other applications, is expected to fall by 5% to 7.587 million ounces this year after growing by 26% in 2023.

Demand from the automotive sector will increase by 2% due to slowing consumer demand for battery electric vehicles, growth in the numbers of heavy-duty and hybrid vehicles, coupled with stricter emissions regulations and the replacement of platinum with palladium, which is expected to reach 742 thousand ounces. This year, it added WPIC, which uses data from consulting firm Metals Focus.

She added that to cover the deficit, above-ground stocks will decline by 12%, after a 17% decline in 2023 to a four-year low of 3.620 million ounces.

Platinum Supply/Demand ('000 ounces)*

2022 2023 2024 23/22 24/23 First quarter Fourth quarter First quarter

Change Change 2023 2023 2023

Supply

Refined production: 5,520 5,604 5,468 2% -2% 1,192 1,532 1,235

– South Africa 3,915 3,956 3,871 1% -2% 778 1,143 816

– Zimbabwe 480 507 502 6% -1% 116 133 121

– North America 263 276 276 5% 0% 71 72 72

– Russia 663 674 616 2% -9% 180 136 178

– Others 200 190 203 -5% 7% 48 48 48

Change in producer stocks +43 +11 0 +33 -23 0

Total mining supplies 5,563 5,615 5,468 1% -3% 1,226 1,509 1,235

Recycling: 1,764 1,557 1,642 -12% 5% 400 338 390

– Automatic catalyst 1,323 1,138 1,201 -14% 6% 287 235 275

– Jewelry 372 349 366 -6% 5% 95 85 98

– Industrial 69 71 75 3% 7% 17 18 17

Total supply

-1%

7,327 7,172 7,111 -2% 1,626 1,847 1,625

Requests

Cars 2,763 3,211 3,269 16% 2% 810 816 832

Jewelry 1,899 1,868 1,978 -2% 6% 463 476 486

Industrial: 2,316 2,626 2,242 13% -15% 656 737 612

– Chemistry 673 786 529 17% -33% 295 132 142

– Petroleum 193 158 156 -18% -1% 41 38 39

– Electricity 106 89 88 -16% -1% 23 22 22

– Glass 505 701 524 39% -25% 80 310 175

– Medical 275 289 299 5% 3% 75 71 78

– Fixed hydrogen 15 33 75 114% 128% 5 13 14

– Others 548 571 571 4% 0% 137 150 142

Investment: -606 318 99 -69% 198 -71 64

– Bullion and coins 259 323 199 25% -38% 128 61 64

-ETF holdings -558 -20 -120 40 -116 11

– Shares held by stock exchanges -307 14 20 29 -16 -11

Total demand

-5%

6,372 8,023 7,587 26% 2,128 1,959 1,994

Balance 955 -851 -476 -502 -112 -369

Above ground inventories 4,947 4,097 3,620 -17% -12%

Source: Mineral Concentration 2020-2024