Platinum Expected to Transition into Supply Deficit
World Platinum Investment Council
According to the latest report published by the World Platinum Investment Council (WPIC), the precious metal is expected to transition into a supply deficit from 2023, with consecutive deficits sustained throughout the two- to five-year market outlook to 2027. Multi-year platinum deficits, accentuated by ongoing substitution of platinum for palladium in automotive end uses, will draw down above-ground platinum stocks and tighten markets at a time of rapid acceleration in the growth of the hydrogen economy. This report introduces the WPIC’s five-year palladium outlook alongside an examination of how platinum group metal (PGM) demand eventually self-solves for market imbalances to account for the fixed primary supply dynamics of polymetallic ore bodies. It expects growth in platinum for palladium substitution to continue until there is a closing of the price differential, but to eventually reverse as platinum posts ongoing market deficits and palladium moves into a surplus. They suspect that this will, importantly, free up the platinum supply to be made available for the rapid growth in the hydrogen economy expected in the mid to late 2020s, meaning platinum will not be a bottleneck in the development of this key energy transition technology.