According to the World Platinum Investment Council (WPIC), the global platinum deficit in 2024 is anticipated to be more significant than previously forecasted, primarily due to diminished supply from mines in South Africa and Russia. The WPIC, comprising major Western platinum producers, made this assertion in a quarterly report released on Monday.
Despite a 5% decrease in demand, the projected deficit for 2024 stands at 476,000 troy ounces, a notable increase from the previous estimate of 418,000 ounces. However, this figure is lower than the deficit recorded in 2023, which amounted to 851,000 ounces.
Edward Sterck, the head of research at the WPIC, highlighted the significance of the supply side, noting that 2024 will mark the second consecutive year of deficit, equivalent to 6% of total demand.
The report underscores challenges in the supply chain, particularly in South Africa and Russia. South African mines are expected to experience a 2% reduction in production this year due to restructuring efforts and slower production ramp-ups, influenced by subdued prices for palladium and rhodium. Similarly, Russia’s supply is projected to decline by 9%, reaching a multi-decade low, as a result of planned smelter maintenance and ongoing repercussions from Western sanctions.
In terms of demand, platinum’s application in catalytic converters, particularly in vehicle exhaust systems, remains a key driver. Despite a 5% anticipated decrease in overall demand this year, demand from the automotive sector is expected to increase by 2%. This growth is attributed to several factors, including slower consumer demand for battery electric vehicles, expansion in heavy-duty and hybrid vehicle segments, stricter emissions regulations, and platinum-for-palladium substitution, forecasted to reach 742,000 ounces in 2024.
The WPIC, relying on data from consultancy Metals Focus, provides valuable insights into the dynamics of the platinum market, emphasizing the delicate balance between supply constraints and evolving demand patterns.