(Kitco News) - A supply deficit and growing industrial and investor demand set the stage for a platinum price recovery according to Trevor Raymond, CEO of the World Platinum Investment Council.
This week Raymond spoke to Kitco Mining correspondent Paul Harris at Mines and Money London.
Compared to other metals, Raymond said platinum has room to run. He noted both supply constraints and demand growth due to industrial demand, namely catalytic converters.
"We've got a situation where platinum remains significantly undervalued compared to gold and significantly undervalued compared to its one-to-one substitute, palladium," said Raymond.
Raymond noted China's uptick in demand, highlighting that the country imported 1.2 million ounces more than their demand needs.
"What's basically happened is that exchange stocks and ETF stocks have flown from the West to the East. Once platinum gets into China, it's pretty difficult to export it, so you've got a lot of metal that is geographically captive in China. It's quite a tight market."
"This is quite unusual that it's in excess of demand and certainly the magnitude is quite enormous."
Raymond is not worried yet about electric vehicles displacing internal combustion engines, which require catalytic converters. He said the transition will take longer than governments and regulator hope. He also said that a nascent hydrogen industry is supportive of platinum.
Raymond forecasts growth for the platinum group metals.
"We'll be moving from quite a significant surplus into a meaningful deficit."
Coverage of Mines and Money London sponsored by Discovery Group.
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