From World Platinum Investment Council
Highlights:
- Second and third consecutive annual platinum market deficits – forecast at 682 koz for 2024 and 539 koz for 2025
- Supply remains severely constrained despite improvements in recycling, edging up 2% in 2024 to 7,269 koz and 1% to 7,324 koz in 2025
- Automotive demand is projected to hit an eight-year high of 3,245 koz in 2025
- Steady growth in the jewellery sector, with a 5% year-on-year increase forecast for 2024 and a 2% increase in 2025, driven by a surge in Indian fabrication
- Industrial demand to decline by 9% in 2025 to 2,216 koz as substantive capacity expansions taper; it will remain above the ten-year average
- In 2025, net positive investment demand is expected for the third consecutive year, bolstered by Chinese bar demand
The market is expected to reach a deficit of 682 koz in 2024, as the exceptionally strong demand from the previous year is sustained, reaching 7,951 koz (flat year-on-year) and again exceeding supply, which remains constrained at 7,269 koz – a 2% increase year-on-year.
In 2025, a third consecutive annual market deficit is forecast at 539 koz, with total demand remaining strong at 7,863 koz (-1% year-on-year) and total supply increasing by 1% to 7,324 koz.
Constrained supply despite strong Q3’24 and improvements in recycling
Despite Q3’24 supply growing by 7% year-on-year to 1,479 koz – primarily driven by increased stock releases in South Africa, which flattered the quarter’s output – global mined supply for the full year 2024 will be essentially flat compared to last year’s constrained levels at 5,683 koz (+1%, +68 koz). Downside risks, such as the persistently low platinum group metal basket price and ongoing restructuring, remain and could continue next year. For 2025, global platinum mine supply is forecast to contract by 2% (-133 koz) year-on-year to 5,550 koz.
The headwinds that have recently affected global platinum recycling supply could be near resolution. The 2024 forecast is for a 3% year-on-year improvement to 1,587 koz, followed by a 12% increase in 2025 to 1,774 koz, which is nevertheless still 8% below the pre-COVID five-year average.
Above ground stocks are expected to decline by 16% to 3,553 koz, just over five months’ worth of demand cover in 2024, and by a further 15% in 2025 to 3,014 koz.
Automotive platinum demand to reach eight-year high in 2025
Amid economic challenges and high interest rates, vehicle production forecasts for this year have been revised downward, particularly in Europe. Consequently, global automotive platinum demand declined by 3% year-on-year (-21 koz) in Q3 2024 and is expected to decrease by 2% year-on-year (-49 koz) in 2024, reaching 3,173 koz, which includes 751 koz of platinum for palladium substitution.
As automakers adjust strategies to boost lower-CO2, internal combustion engine-based, hybrid vehicle sales, to mitigate regulatory challenges, automotive platinum demand is projected to strengthen by 2% year-on-year to reach 3,245 koz in 2025 – the highest level since 2017.
Steady growth in the jewellery sector
Global jewellery demand increased by 7% year-on-year to 478 koz in Q3 2024 (+32 koz), driven largely by a 68% surge in Indian jewellery fabrication to 66 koz, the second-highest quarterly figure in our time series since 2013. This rise, along with gains in key markets such as Japan and North America, will help overall jewellery demand for 2024 increase by 5% (+102 koz) year-on-year to 1,951 koz.
This positive trend is expected to continue into 2025, with a projected 2% (+32 koz) increase in demand to 1,983 koz. Growth is anticipated to continue in India, and also expected in North America, driven by post-election sentiment, and, in China, supported by product innovations.
Industrial demand to contract by 9% in 2025 as capacity expansion projects taper
The industrial sector saw robust demand in Q3 2024, increasing by 15% year-on-year (+76 koz). For full year 2024, industrial demand will ease back by just 1% compared to the previous year to 2,434 koz. Gains in the electrical (+1% to 90 koz), medical (+4% to 303 koz), hydrogen (+123% to 64 koz), and glass (+29% to 671 koz) sectors will be offset by a 28% decline in the chemical sector, as cyclical capacity expansions in China conclude.
After three years of exceptional growth, industrial demand is projected to contract by 218 koz to 2,216 koz in 2025, representing a 9% decrease. This downturn is primarily due to a 57% (-385 koz) drop in platinum demand from the glass sector to 286 koz, due to fewer capacity expansions. However, 2025 is expected to see strong growth in the chemical (+17% to 656 koz), petroleum (+31% to 211 koz), medical (+4% to 314 koz), and hydrogen (+32% to 84 koz) sectors.
Third consecutive year of net positive investment demand expected in 2025
Outflows in ETFs and exchange stock movements in Q3 2024 led to net disinvestment of 226 koz for the quarter, the first-time net disinvestment has occurred this year. In 2024, a 17% increase in demand for larger bars in China (500g and over) to 157 koz and net positive ETF holdings of 150 koz for the full year are expected. However, this will be offset by a 47% (151 koz) drop in global bar and coin demand, excluding China larger bars, driven by price-driven selling in Japan and weaker demand in North America. The result will be net positive investment demand of 393 koz for the full year.
For 2025, total investment demand is expected to rise 7% to 420 koz, driven mainly by growth in stocks held by exchanges and an 8% increase in demand for bars of 500g and larger in China. While global bar and coin investment demand is forecast to ease by 12% to 151 koz, bar and coin demand in North America is projected to return to growth. Platinum ETF holdings are also expected to rise by 50 koz, as some US investors look to gain exposure to higher-for-longer internal combustion engine vehicle production.
