In 2023, platinum market is still expected to face supply shortages amid demand growth. Automotive demand rose 9% (+69 koz) to 806 koz in Q1’23, partly aided by higher vehicle production, but mainly by increased platinum use per vehicle. On a full-year basis, global automotive demand is expected to rise by 12% in 2023 to 3,255 koz (+357 koz year-on-year), driven by a number of factors, as per a press release from the World Platinum Investment Council (WPIC).
Refined mine production declined 8% (-96 koz) in Q1 2023 year-on-year and fell 11% (-151 koz) against Q4 2022, as gains from Russia failed to offset reduced output from South Africa. Output in South Africa declined 14% (-119 koz) year-on-year as smelter maintenance and the impact of the country’s ongoing electricity shortages hampered output. While mined platinum supply is forecast to fall by a modest 1% (to 5,511 koz) in 2023, as reductions in South Africa are partially offset by gains in Zimbabwe and North America, significant uncertainties still exist for South African platinum supply.
Global recycling of platinum remained sluggish in the first quarter of 2023, falling 12% (-56 koz) year-on-year to 413 koz, due to reduced volumes of end-of-life vehicles as a result of fewer new vehicles being sold. Meanwhile, the regulatory environment in North America aimed at curbing autocatalyst theft also hindered recycling volumes. With both issues likely to prevail throughout 2023, the full-year platinum recycling supply is forecast to fall by 1% (-9 koz) to 1,682 koz.
Trevor Raymond, CEO of the World Platinum Investment Council, commented: “From a macro perspective, 2023 presents a raft of both existing and new challenges, with an uncertain economic and interest rate environment, turmoil in the banking sector, inflationary headwinds and a global energy crisis. Against these challenges, platinum is, counterintuitively, forecast to see a meaningful and sustained period of deficit. Importantly, the core drivers of platinum’s expected 28% demand growth in 2023 are areas where the downside risks are well protected. These include the ongoing platinum for palladium substitution in automotive applications, and already committed glass and chemical capacity additions in China, both supported by increasing investment demand.”
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
