Platinum prices soared as high demand met low supply.
Tomohiro Ohsumi | Bloomberg | Getty Images
According to the World Platinum Investment Council, the previously projected shortage of platinum will be worse than expected this year due to higher demand, especially from the industrial sector.
Global platinum demand will rise 28% this year compared with 2022, while supply will fall 1% year-on-year, the group said on Monday.
The WPIC reports that the platinum deficit will be around 983,000 ounces (983 koz) in 2023, an upward revision of 77% from its latest forecast in March.
The report estimates that industrial demand, especially chemical and glass production in China, is on track to hit record highs. Demand from the automotive sector also continued to be strong as platinum became more commonly used as a substitute for expensive palladium in catalytic converters, the report said.
Platinum was trading around $1,070 a troy ounce on Monday morning, having hit a multi-year high of around $1,130 in April.
Platinum prices.
Investors shined brightly on precious metals in the first quarter of 2023, with bar and coin investment up 71% compared to the same period last year. The 102,000 ounces of investment was the highest total since the third quarter of 2021, the WPIC reported, helped by renewed strength in Japanese demand.
The committee’s chief executive, Trevor Raymond, said in the report that an uncertain global economic environment, inflation headwinds and energy crises provide a challenging macroeconomic backdrop for the platinum industry, but the likelihood of a decline in the value of the precious metal is low.
“Importantly, the core driver of the projected 28% growth in platinum demand in 2023 is an area where downside risks are well protected,” Raymond said.
“These include the ongoing substitution of platinum for palladium in automotive applications, as well as already committed glass and chemical capacity additions in China, both supported by increased investment demand,” he added.