 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) - Palladium was on of the top performing metals of the last decade due to catalytic converter demand, but Johnson Matthey says that platinum is finally catching up.
Johnson Matthey's latest PGM Market Report was released today, and it forecasts that platinum supply will fall short of demand in 2023.
Demand for platinum is forecast to rise by nearly 20% in 2023, with investment returning to positive territory after two years of investor selling, and use of platinum in gasoline autocatalysts gaining momentum, noted Johnson Matthey. Consumption in industrial applications is expected to remain firm despite temporary weakness in the LCD glass sector, which has been hit by a downturn in consumer electronics.
The analysis in the report shows that combined primary and secondary supply is expected to grow by?5% as South African producers treat backlogs that accumulated during recent smelter maintenance and vehicle recycling rates begin to improve.
The palladium market is expected to move closer to balance in 2023, the report's authors noted, saying supply should rise modestly, while they anticipate demand to be hit by further platinum-for-palladium substitution in gasoline vehicles. Automotive consumption is forecast to fall for a fourth consecutive year and will be around 15% lower than the 2019 demand peak.
"Over the last three years, we've seen exceptionally high prices and unusual volatility in the palladium and rhodium markets," said Rupen Raithatha, Market Research Director at Johnson Matthey. "Automotive and industrial users have responded by investing in substitution and technical innovation, to reduce their reliance on these metals. This has been highly positive for platinum.”
"We're forecasting double-digit growth in automotive platinum demand this year as car companies continue to implement substitution programmes,” Raithatha added. "As a result, we expect platinum supply to fall short of demand in 2023, following two years of significant surplus.”
