WPIC: 2024 Platinum Deficit Revised Upward to 476,000 Ounces

Watch the full interview with Sterck.

Refined production in South Africa is expected to decline by 2 percent year-on-year due to announced restructuring plans, closures of shafts/sections and slower production ramp ups than previously anticipated.

Similarly, Russian supply is projected to be affected by planned smelter maintenance throughout 2024. In North America, headcount reductions are anticipated to impede the return of production to pre-2020 levels.

Recycling also contributes to platinum supply, and while it showed some improvement in Q1 compared to the fourth quarter of 2023, it remains historically weak. The WPIC reported better jewelry recycling, primarily driven by the liquidation of platinum jewelry stocks, but said weakness persists in automotive recycling and the electronics sector.

Automotive sector leads platinum demand higher

On the demand side, automotive platinum demand is benefiting from ongoing substitution of platinum for palladium, increased production of light- and heavy-duty vehicles and hybridization trends.

Coming in at a seven year high in Q1, automotive demand was 832,000 ounces, which Sterck said was partially the result of consumers' reluctance to switch from internal combustion engine vehicles to electric vehicles (EVs).

He noted that EV market share has stalled out at about 20 to 25 percent in China, while Europe is at about 20 percent. North America is quite a bit lower, at only single digits for EV market share.

"That said, they are prepared to make the switch to partial electrification. So we're seeing the fastest-growing segments now are hybrid vehicles," he said, adding that these vehicles require platinum. "I think the kind of impact here really is that what we're seeing is potentially a higher-for-longer environment for platinum for automotive end uses."

Meanwhile, platinum demand from the jewelry sector is expected to rebound from a low base, with an anticipated increase of 109,000 ounces in 2024. The WPIC anticipates that this growth will be broad-based, with India expected to lead the way in terms of growth, while China is poised for a mild recovery.

Total industrial demand for platinum is forecast at 2,242,000 ounces in 2024, reflecting a 15 percent decline year-on-year. This decline should be understood in the context of record demand levels in 2023.

The industrial demand segment now includes a separate line item for the hydrogen economy, accounting for 75,000 ounces and representing a significant increase of 128 percent year-on-year. This encompasses applications such as electrolysis, stationary power and non-automotive fuel cell mobility.