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Platinum market faces deficit after two years of surplus
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Power supply risks, operational challenges limit supply growth
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WPIC: platinum deficit may persist for a number of years
LONDON, March 8 (Reuters) - A global deficit of platinum in 2023 will be deeper than previously expected due to strong industrial demand, the World Platinum Investment Council (WPIC) said in a quarterly report on Wednesday, adding that the shortage could persist for years. Demand for platinum, also used in vehicle exhausts and jewellery, is forecast to grow by 24% this year as some of the auto sector is replacing palladium with cheaper platinum and demand for bars and coins is improving, the WPIC said. Due to power supply risks and operational challenges, the global supply is expected to rise only by 3% in 2023, leaving the market with a deficit of 556,000 troy ounces compared with the previously expected deficit of 303,000 ounces, the WPIC added. "The platinum market is forecast to be in deficit after two consecutive years of significant surpluses," Trevor Raymond, WPIC chief executive, said in the report. "This year's forecast deficit is unlikely to be a one-off... with challenges to supply expected to continue and future demand growth... likely to result in deficits continuing for a number of years," he added. A worsening of electricity supply shortages in major producer South Africa and sanctions-related operating challenges in Russia are among downside risks to the global supply, the WPIC, which uses data from consultants Metals Focus, added. The WPIC's published data does not capture much of China's platinum imports, which, from the council's point of view, were far in excess of identified demand since 2021. The WPIC believes that this metal will not leave China to re-enter Western markets due to domestic export controls and will not help to address the global deficit in 2023. PLATINUM SUPPLY/DEMAND ('000 oz)*
2021 2022 2023f 2022/ 2023/
2021 % 2022 %
change change
SUPPLY
Refined Production 6,297 5,579 5,573 -11% 0%
South Africa 4,678 3,975 3,920 -15% -1%
Zimbabwe 485 480 502 -1% 5%
North 273 260 302 -5% 16%
America
Russia 652 663 644 2% -3%
Other 208 201 205 -3% 2%
Change in producer -93 -35 +0
inventory
Total Mining Supply 6,204 5,545 5,573 -11% 1%
Recycling 2,032 1,682 1,856 -17% 10%
Autocatalyst 1,543 1,242 1,391 -20% 12%
Jewellery 422 372 395 -12% 6%
Industrial 67 68 69 3% 2%
Total Supply 8,235 7,227 7,428 -12% 3%
DEMAND
Automotive 2,647 2,957 3,246 12% 10%
Jewellery 1,953 1,894 1,936 -3% 2%
Industrial 2,530 2,243 2,505 -11% 12%
Chemical 682 629 619 -8% -2%
Petroleum 171 188 180 10% -4%
Electrical 135 106 100 -21% -6%
Glass 728 474 737 -35% 55%
Medical 269 275 283 2% 3%
Other 546 570 587 5% 3%
Investment -53 -643 298
Change in 324 225 450
Bars, Coins
Change in -238 -560 -132
ETF Holdings
Change in -139 -307 -20
Stocks Held
by Exchanges
Total Demand 7,077 6,451 7,985 -9% 24%
Balance 1,158 776 -556 -33%
Above Ground Stocks 3,679 4,455 3,899 21% -12%
* Source: World Platinum Investment Council, Platinum Quarterly Q4 2022
(Reporting by Polina Devitt; Editing by Sharon Singleton)
