Metals Focus: Platinum market surplus to fall by 40% this year

Metals Focus, a leading independent precious metals market research firm, said it expects the surplus in the nearly 8-million-ounce-a-year platinum market to be down 40% this year from 2021 to 477,000 ounces with platinum trading at $990 an ounce, according to a Reuters report form London.
Platinum, along with palladium and rhodium, is used in the automotive industry to produce catalytic converters that reduce harmful engine emissions into the atmosphere.
According to Metal Focus, the supply of palladium and rhodium on the market will decline this year amid rising demand for these metals, which will cause their shortage. Demand for platinum will also increase, which will reduce its surplus in the market.
The consulting firm notes that, however, palladium and platinum production may be limited by the conflict in Ukraine, which involves Russia, one of the world's main producers of these precious metals, while their production in South Africa, another key producer, will fall. In addition, logistical issues and limited automotive scrap feedstock will also impede supply from recycling.
The roughly 10 million ounce a year palladium market should swing back from its first surplus in 10 years in 2021 to a deficit of 521,000 ounces in 2022 and prices would average $2,290 an ounce this year, Metal Focus said pointing to that palladium prices surged to a record high of $3,440.76 an ounce earlier this year and now stay around $1,930 an ounce.
According to the consulting firm, the 1-million-ounces-a-year rhodium market will face a deficit of 30,000 oz in 2022, with the metal's average price dropping 17% year-over-year to $17,750 an ounce (rhodium is currently trading at $15,600 per ounce).