Platinum Deficit Narrows in 2024, but Market Outlook Remains Tight: WPIC
The World Platinum Investment Council (WPIC) has revised its platinum market forecast for 2024, projecting a deficit of 682,000 ounces (koz), a decrease of 347 koz from earlier estimates.
By Ryan Chigoche
This updated deficit, representing about 9% of the anticipated annual platinum demand, reflects stronger-than-expected supply growth and a downward adjustment in demand forecasts.
Supply and Demand Overview
According to the WPIC’s Q3 2024 report, total platinum supply is expected to grow by 2% year-on-year, reaching 7,269 koz in 2024. This revision, up by 180 koz, is attributed to increased mine production in South Africa and Russia.
South African producers have benefited from the release of work-in-progress inventory, while Russian miners have exceeded expectations by completing maintenance faster than anticipated.
On the demand side, total platinum demand in 2024 is forecast to remain unchanged at 7,951 koz, consistent with 2023 levels. However, the demand outlook was revised down by 166 koz due to reduced ETF outflows (-85 koz) and weaker-than-expected automotive sales (-64 koz).
The decline in automotive demand is attributed to softer vehicle sales in Europe rather than a shift to electric vehicles. Due to fewer chemical plant commissions in China, industrial demand is also expected to drop by 1%.
In contrast, the jewellery sector is projected to see a 5% rise in platinum demand, driven by growth in most regions except China, where consumer spending remains sluggish.
2025 Outlook
Looking ahead, the WPIC predicts another market deficit in 2025, estimated at 539 koz, or 7% of total demand. Platinum supply is forecast to grow by just 1%, with mine production declining by 2% due to restructuring in South Africa and North America.
The closure of the Stillwater West mine in North America is expected to contribute to the reduction in mined supply. However, recycling is set to play a more prominent role, with recycled platinum supply projected to increase by 14% year-on-year, driven by higher scrap availability from end-of-life vehicles.
Demand in 2025 is forecast to decline slightly by 1%, with industrial demand anticipated to drop by 9% due to fewer new glass capacity start-ups. Conversely, automotive demand is expected to grow by 2%, supported by increased hybrid vehicle production and the ongoing substitution of palladium with platinum.
The jewellery market is forecast to experience continued growth, particularly in the US and India, alongside a modest recovery in China. Investment demand, however, is expected to slow due to weaker ETF purchases and reduced bar and coin buying.
Market Challenges and Implications
Despite the revised deficit for 2024, the platinum market remains under significant pressure from supply constraints and resilient demand across key sectors.
Over the three-year period from 2023 to 2025, the cumulative market deficit is expected to reach nearly 2 million ounces, further depleting above-ground stocks.
The WPIC’s report highlights the complexities facing the platinum market, including challenges in mine production, evolving demand patterns, and the critical role of recycling in offsetting supply shortages.
As global supply continues to lag behind demand, the platinum market is expected to remain in deficit through 2025. This persistent tightness is likely to support robust market fundamentals and influence platinum prices in the years ahead.