The World Platinum Investment Council recently published its thirty-sixth Platinum Quarterly data set, which examines activity in the second quarter of 2023. It also includes an updated forecast for full-year 2023. Independent analysis is provided by its research partner, Metals Focus.
The Foreword to the report provides an overview of supply and demand developments in the platinum market, as well as our view on issues and trends relevant to considering exposure to platinum as an investment asset, the company said.
Key information from the report, which can be downloaded here, is highlighted below:
- Platinum deficit forecast for 2023 now over 1 million ounces
- Total demand expected to increase 27% in 2023, while total supply will be flat
- Automotive recovery will see 2023 demand up 13% (+381 koz), driven by greater-than-expected vehicle production, increased substitution and higher loadings
- Capacity expansions drive forecast industrial demand in 2023 to a record 2,667 koz
- Strong ETF demand in Q2’23, with 2023 forecast total investment of 386 koz
Strong quarterly increase in vehicle production adds to existing drivers for platinum automotive demand growth
Platinum automotive demand rose 19% year-on-year (+136 koz) to 840 koz in Q2’23, as the semiconductor shortage continued to ease, leading to a healthy uplift in vehicle production.
For full-year 2023, automotive platinum demand is being driven higher by increased vehicle production, with LDV and HDV production forecast to grow by 6% and 7% respectively, ongoing substitution of platinum for palladium, and higher platinum group metal (PGM) loadings. These factors will lift 2023 global platinum automotive demand by 13% (+381 koz) to 3,283 koz.
2023 industrial demand forecast revised upwards
Industrial platinum demand totalled 697 koz in Q2’23, a 12% increase year-on-year and its highest level since Q3’21. Looking at 2023 as a whole, the already record-breaking forecast for industrial demand has been revised even higher, to 2,667 koz (+14% year-on-year, +336 koz). This is in large due to capacity expansions in glass (+50%, +251 koz) and chemical (+12%, +82 koz) applications.
Net investment demand of 386 koz forecast for 2023
As with the previous quarter, Q2’23 saw increased investor interest resulting in net positive investment demand of 154 koz. Platinum ETF holdings grew by 155 koz in Q2’23. However, overall ETF holdings are expected to soften during the rest of 2023. Despite a fall in global bar and coin investment to 26 koz (-64%, -46 koz) in the second quarter, full-year 2023 is likely to see a year-on-year jump of 45% (+102 koz), to 326 koz, the first growth in bar and coin investment in three years, driven by a return to positive net platinum investment in Japan. The result will mean net investment demand of 386 koz in 2023.
Total supply remains constrained
Refined mine production declined 4% (-65 koz) year-on-year in Q2’23, totalling 1,464 koz, as increases from North America and Russia were heavily outweighed by a decline from South Africa. For 2023, mined platinum supply is forecast to be flat on 2022 (5,565 koz), although South African platinum supply remains vulnerable to ongoing electricity shortages.
Global recycling of platinum declined 12% (-46 koz) year-on-year to 345 koz in Q2’23. Supply from spent autocatalysts was down 13% (-37 koz) year-on-year, with lower-than-expected end-of-life vehicle supply persisting. Full-year platinum recycling supply is forecast to fall by 4% to 1,620 koz.