In 2023, the platinum market will be in deficit and much more than expected, according to the latest calculations by the international group of industrialists and miners in the sector, the WPIC World Platinum Investment Council. The organization expects demand to increase by 24% in a context where supply should only increase, according to its latest projections, by 3%.
A deficit harbinger of a tight market for several years
Demand is indeed on an upward trend. Car manufacturers are more and more consumers. The development of hydrogen vehicles, but above all the general trend to substitute platinum for palladium in vehicles with combustion engines, explains this increase. This substitution is motivated by economic reasons, an ounce of platinum is now worth 400 dollars less than that of palladium.
It is also motivated by a principle of anticipation: unlike palladium, of which Russia is the leading producer, more than 70% of platinum is produced in South Africa. The possibilities of market disruption are therefore less, “uan embargo on Russian precious metals cannot be ruled out if the conflict were to continue “, explains Didier Julienne, president of the company Commodities and Resources and former director at Norilsk Nickel, the Russian producer of platinum and palladium.
Platinum: the choice of a more secure supply
Opposite, the offer is struggling to take off. South Africa has been plagued by electricity supply difficulties this year. Despite the growing energy self-sufficiency of the country’s miners, production has not lived up to forecasts.
In this context, platinum prices are on the rise while those of palladium are falling. We should therefore expect a rebalancing in the medium term. ” But the geopolitical risk is greater than the financial advantage for manufacturers who have opted for security of supply with platinum. adds the raw materials expert.