The platinum market has entered a period of sustained deficits, with global platinum organisation World Platinum Investment Council’s (WPIC’s) Platinum Quarterly supply and demand data estimating a deficit of over one-million ounces for 2023, and a second consecutive deficit of 353 000 oz forecast this year.

Beyond 2024, moreover, the WPIC’s recent Two- to Five-Year Supply/Demand Outlook indicates further platinum market deficits continuing each year through 2028, says WPIC research director Edward Sterck.

“Last year saw exceptionally strong year-on-year total demand growth of 26% to over 8.1-million ounces. While this year will not see a repeat of the demand achieved in 2023, total demand is nevertheless forecast at over 7.6-million ounces,” he says.

Although this is a 6% year-on-year reduction, total demand remains on a par with average demand levels since 2015, which Sterck says demonstrates resilience in the face of the prevailing challenging economic environment.

The demand of 2023 was driven by buoyant automotive and industrial growth, which is expected to continue into 2024, albeit to a lesser extent.

The WPIC reports that 2023 was the strongest year for industrial platinum demand on record, surging 14% year-on-year to more than 2.6-million ounces, propelled by significant capacity expansions in the glass and chemical sectors.

While industrial demand is forecast to fall 11% year-on-year in 2024 owing to fewer capacity additions, it will nevertheless be the third-highest level on record at more than 2.3-million ounces.

The platinum jewellery market continued to face headwinds in 2023, with demand declining 3% year-on-year to more than 1.8-million ounces. However, the WPIC notes that an ongoing reduction in jewellery demand could stabilise this year, suggesting a minimum demand limit has been reached, with a modest 3% growth being expected.

The outlook for investment demand this year is more challenging than in 2023, when it reached 385 000 oz – a factor the WPIC says needs to be considered in the context of the prevailing high interest rate environment that has weighed on demand for non-yielding assets.

Investment demand of 82 000 oz is forecast, and the WPIC believes there may be the potential for upside should interest rates start to fall more quickly than the WPIC’s forecast anticipates, or investors could find consecutive deficits an incentive to increase holdings.

Supply constraints in mining and recycling persist, Sterck reports, adding that platinum’s total supply is expected to show modest 3% growth, while remaining well below pre-Covid levels at more than 7.3-million ounces, some 9% lower than average yearly supply in the five years prior to 2020.

In 2024, platinum mine supply is forecast to grow 3% year-on-year to more than 5.7-million ounces, with a 5% improvement in South African output expected, reveals Sterck.

However, he reports that this “modest growth” could be eroded in the case that miners reassess production plans and restructure operations.