Platinum deficit in 2024 to be deeper than expected – WPIC

The 2024 deficit of 418,000 troy ounces will, however, be smaller than 2023’s 878,000 ounces due to lower demand, the WPIC, whose members are major Western platinum producers, said in a quarterly report on Wednesday.

It previously projected the 2024 shortage at 353,000 ounces.

Demand for platinum, used in catalytic converters to reduce harmful emissions from vehicle exhaust systems among other applications, is expected to fall by 6% to 7.507 million ounces this year due to weaker industrial demand after a record 2023.

Yet demand from the auto sector will increase by 1% due to continuing substitution of platinum for palladium , the WPIC, which uses data from consultancy Metals Focus, added.

Total supply, meanwhile, will dip 1% to 7.089 million ounces as a 3% decrease in mine supply – largely from South Africa and Russia – will be partly offset by a 7% recovery in recycling.

To cover the deficit, above-ground stocks will fall by 10%, after an 18% drop in 2023 to a four-year low of 3.581 million ounces, it added.

Platinum prices are down 11% so far this year after an 8% fall in 2023, which the WPIC believes to be a function of algorithmic trading and automakers managing elevated platinum inventories, accumulated during the pandemic and the semiconductor shortage in 2020-2022.

“Range-bound trading will likely continue until price breaks out of that range, but we estimate that the automaker inventory management process is close to having run its course,” WPIC chief executive Trevor Raymond said in the report.