Platinum Facing Big 2023 Deficit on Rising Demand and Constrained Supply

Investors snap up platinum in 2023's first quarter

Looking at the first quarter of 2023, investment demand had a great moment, according to the WPIC.

Sterck told INN this was fueled by exchange-traded fund (ETF) inflows, noting that net platinum ETF holdings rose by 43,000 ounces during the period, changing course after six quarters of outflows.

“While the European and North American funds were still liquidating, those in South Africa have seen substantial growth, as the deterioration in the local operating environment (constrained power supply) for miners, combined with the improved outlook for the metal’s fundamentals, stimulated investor interest,” the WPIC's report states.

All investment measurements tracked by the council — bars, coins, ETFs and exchange stocks — were up in Q1.

Investor takeaway

Sterck told INN the growing platinum deficit could bring changes in how investors view the market.

“What we could see is if European and North American investors kind of wake up to this deficit a bit more actively, then potentially we could see more demand that might exacerbate the deficit further," he explained.

At the same time, there are noteworthy concerns on the supply side. "On the supply side, I just think there's pretty significant downside risk potential to output from South Africa and Russia," Sterck said.