By Polina Devitt
LONDON (Reuters) – The global platinum shortage will be wider in 2024 than previously expected due to lower supply from mines in South Africa and Russia, the World Platinum Investment Council (WPIC) said on Monday.
However, the 2024 shortfall of 476,000 troy 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. The company had previously forecast the 2024 shortage at 418,000 ounces.
“We have a shortage for the second year in a row, which will be equal to 6% of total demand in 2024,” said Edward Sterck, head of research at the WPIC. “The focus is on supply, which was the second lowest in our time series in the first quarter, with the full year also expected to be near the record lows of 2020.”
The already announced restructuring and slower than previously expected production increases against the backdrop of low palladium and rhodium prices will reduce production from South African mines by 2% this year. Supply from Russia, which plans smelter maintenance in 2024 and continues to suffer the damage caused by Western sanctions, will fall 9% to the lowest level in decades.
Meanwhile, demand for platinum, used in catalytic converters to reduce harmful emissions from vehicles including exhaust systems, is expected to fall 5% this year to 7.587 million ounces, after growing 26% in 2023.
Automotive demand will increase by 2% due to slower consumer demand for battery-electric vehicles, growth in both heavy-duty and hybrid vehicles, in addition to stricter emissions regulations and the replacement of platinum with palladium, which is expected to reach 742,000 ounces reaches. this year the WPIC, which uses data from consultancy Metals Focus, added.
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To cover the shortfall, above-ground inventories will fall 12%, after falling 17% in 2023 to a four-year low of 3.620 million ounces, it added.
PLATINUM DEMAND/ASK (‘000 oz)*
2022 2023 2024 23/22 24/23 Q1 Q4 Q1
change change 2023 2023 2023
DELIVERY
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
– Other 200 190 203 -5% 7% 48 48 48
Change in producer inventory +43 +11 0 +33 -23 0
Total mining supply 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
– Car 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 OFFER
-1%
7,327 7,172 7,111 -2% 1,626 1,847 1,625
ASK
Automotive 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
– Chemical 673 786 529 17% -33% 295 132 142
– Petroleum 193 158 156 -18% -1% 41 38 39
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– Electric 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
– Hydrogen stationary 15 33 75 114% 128% 5 13 14
– Other 548 571 571 4% 0% 137 150 142
Investment: -606 318 99 -69% 198 -71 64
– Bars, coins 259 323 199 25% -38% 128 61 64
– ETF shares -558 -20 -120 40 -116 11
– Stocks 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 stocks 4,947 4,097 3,620 -17% -12%
Source: Metal Focus 2020–2024
