The World Platinum Investment Council (WPIC®) has released its Platinum Quarterly report for the third quarter of 2024, revealing a market that continues to experience a significant supply deficit. Despite strong demand, estimated at 7,951 koz for 2024, the supply remains insufficient, leading to an estimated deficit of 682 koz this year. This pattern of constrained supply and robust demand looks set to continue into 2025, with a forecasted deficit of 539 koz. The figures reflect a platinum market that is adapting to a range of pressures and opportunities, from industrial supply chain challenges to shifts in automotive technologies.
Supply constraints have been a persistent issue, even as Q3’24 saw a 7% year-on-year increase in supply, primarily due to higher stock releases in South Africa. Despite this temporary boost, global mined platinum supply for 2024 is essentially flat, with only a modest increase of 1% to 5,683 koz, indicating that the industry continues to struggle with challenges such as low platinum group metal basket prices and the need for restructuring. Looking ahead to 2025, a 2% contraction in mined platinum supply is forecast, which underscores ongoing vulnerabilities in the production landscape. Recycling, an important component of platinum supply, is showing signs of recovery, with an expected 12% increase in recycled volumes in 2025, although these levels still fall short of pre-COVID averages. Above ground stocks of platinum are also forecasted to decline sharply by 16% in 2024, providing just over five months of demand cover, and are expected to drop further in 2025, suggesting a tightening market for the foreseeable future.
The automotive sector is one of the key areas of demand growth, projected to reach an eight-year high by 2025. Despite economic challenges and high interest rates leading to revised vehicle production forecasts, particularly in Europe, platinum demand from the automotive industry remains resilient. In 2024, automotive platinum demand is expected to decrease slightly by 2%, largely due to reduced vehicle production, but is set to rebound in 2025, growing by 2% year-on-year to reach 3,245 koz. This growth will be driven by automakers adjusting their strategies to boost hybrid vehicle sales as a way to navigate regulatory challenges and sustain internal combustion engine-based solutions with lower CO2 emissions. Platinum’s role in palladium substitution further strengthens its demand, marking it as a crucial material for the automotive sector’s ongoing transformation towards hybrid vehicles, even amidst the slowdown in battery electric vehicle (BEV) adoption.
Jewellery demand also remains a bright spot, with an impressive 7% year-on-year increase in Q3 2024, largely driven by a surge in Indian demand. This positive momentum is expected to persist into 2025, with projected growth in key regions such as North America, Japan, and China. The post-election sentiment in North America and innovative new products in China are contributing factors that are expected to sustain and boost consumer interest in platinum jewellery. Meanwhile, the industrial sector, which saw significant growth in Q3 2024, is forecasted to face a contraction in 2025 as some of the expansion projects in the glass sector come to an end. Despite this, strong growth is anticipated in chemical, petroleum, and medical applications, as well as in the hydrogen sector, where demand for platinum is set to rise significantly, albeit from a smaller base, reflecting the burgeoning interest in green hydrogen initiatives globally.
Investment demand for platinum is also showing resilience. Despite the net disinvestment seen in exchange-traded funds (ETFs) and stock movements during Q3 2024, investment in larger platinum bars in China is on the rise, along with expectations of net positive ETF holdings for the year. The total investment demand is forecasted to grow by 7% in 2025, driven by increased exchange stocks and higher demand for larger bars in China. Costco’s recent move to sell platinum bars and coins is a notable development that has helped increase platinum’s visibility among investors in the United States, particularly as a viable component of retirement portfolios. This development highlights the growing perception of platinum not just as an industrial metal but also as a valuable investment asset.
Trevor Raymond, CEO of WPIC, emphasized the unique resilience of platinum amidst a challenging economic landscape. Despite the uncertainties of the global economy, platinum’s diverse applications—from automotive to hydrogen energy—underscore its enduring relevance. Raymond highlighted that ongoing supply challenges, such as the restructuring of mining operations due to low profitability of platinum group metals, could have lasting impacts on production capabilities. Yet, demand growth continues, especially in the automotive sector, which benefits from stricter emissions legislation, and the anticipated growth in green hydrogen production further supports platinum’s role as a key player in the global shift towards decarbonization.
As the platinum market braces for another year of constrained supply and significant deficits, the diverse and expanding uses of platinum—spanning automotive, industrial, jewellery, and investment sectors—paint a picture of a metal that, despite the challenges, continues to be pivotal in both traditional and emerging industries. The ongoing supply deficit, coupled with sustained and broad-based demand, suggests that platinum will remain a critical material not only for its historical applications but also for the evolving needs of a greener and more technologically advanced future.
