Edward Sterck: Platinum on Track for Record Deficit, Price Catalysts Building

With demand strong and supply flat, platinum is on track for a record 2023 deficit of 1,071,000 ounces.

Edward Sterck, director of research at the World Platinum Investment Council (WPIC), broke down those dynamics and what they could mean for the metal's price, which remains stuck in the US$900 to US$1,100 per ounce range.

"I think the key point for this year is it's very much a demand-led deficit," he told the Investing News Network.

Total demand is expected to rise 26 percent year-on-year in 2023, led by 14 percent increases for automotive and industrial demand. Meanwhile, overall supply is set to drop 3 percent from 2022.

Sterck noted that many trends seen this year are likely to continue next year, creating a second consecutive platinum deficit. At 353,000 ounces, the 2024 shortfall will be smaller than the one seen in 2023, but still sizeable — the WPIC anticipates that demand will fall 6 percent year-on-year, while supply will see a 3 percent boost.

Whether that will help platinum break out of its price rut remains to be seen, but it's worth keeping an eye on.

"Two years of consecutive deficits is something that we think should be quite interesting from an investment perspective," Sterck said. "You can't really have a deficit in the commodity markets. You either get a price increase until you begin to get demand being priced out of the market, or you begin to get a supply response."

Watch the interview above for more from Sterck on the platinum sector.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.