Ole Hansen, head of commodity strategy at Saxo Bank suggests that the return of investor demand through ETFs could push the platinum market into a supply deficit. Also, the Russia-Ukraine geopolitical situation led to an uptick in platinum demand as automakers substitute the metal for palladium. Russia is pallidum-rich, and as of 2022, one Russian mining company, MMC Norilsk Nickel PJSC, the world's largest nickel producer, produces about 40% of Russian palladium. Russia produces about 30-40% of the world’s palladium, notes kitco.com.
Now, with Russia facing Western sanctions, finding some substitute has become necessary and that’s where platinum has won. As platinum is increasingly used as a substitute for palladium in the production of emission-control catalytic converters, its demand is expected to grow. In addition, platinum's role in environmental-friendly hydrogen fuel-cell-powered vehicles makes it an essential component in the push for greener technology.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished