JM expects significant reduction in palladium shortage in 2023

(RIA Novosti/Prime) - The deficit of palladium in the world market will be reduced to a minimum of 43,000 ounces (1.34 tons) in 2023 against 531,000 ounces (16.5 tons) in the last year, Johnson Matthey says.
Primary supply for all three metals (platinum, palladium, rhodium) is expected to increase this year, according to experts, in line with improved availability of smelters in South Africa and some additional growth at mines currently undertaking expansion programs.
“Despite the fact that Russian PGM production may decline, we expect Norilsk Nickel to mobilize metal stocks that were not sold last year, maintaining shipments at about the level of 2022,” the review says.
Secondary shipments should also show modest gains, although JM estimates there is some downside risk if falling palladium and rhodium prices cause an increase in spent catalytic converter "hoarding".
Demand for PGM is forecast to remain relatively strong, especially for platinum, which could rise in the double digits.
“Overall, we expect a return to more balanced conditions in the PGM markets this year. While we show the platinum market in a small deficit, there are ample market stocks available to meet consumer demand. For palladium and rhodium, the risk of renewed liquidity crises has receded, in view of the subdued outlook for ICE vehicle production, along with platinum-for-palladium substitution in autocatalysts, and technical developments that have released significant quantities of rhodium from the fibreglass industry," JM experts noted.
JM forecasts 2023 palladium demand to decline 1% to 9.833 Moz, supply up 4% to 9.79 Moz, including 3.9% Initial Supply to 6.556 Moz. Primary supply from Russia will remain at the level of last year - 2.6 million ounces, from South Africa - will grow by 7% to 2.44 million ounces.