WPIC – Platinum Essentials, Jan 2024

The authors provide an updated outlook on the supply and demand of platinum in their WPIC - Platinum Essentials report for January 2024. They compare this outlook to their previous forecast published in June 2023. They note that the macroeconomic conditions have improved since then, but they remain volatile due to geopolitical tensions. Inflation is slowing and central banks suggest that interest rates have reached or are near their peak. However, there is no consensus on how long interest rates will remain elevated. Regionally, the authors anticipate a soft landing for the US economy, while European growth is slowing and a mild recession is expected. China faces ongoing uncertainty due to challenges in its debt-laden property sector. The authors take these additional economic considerations into account when revising their outlook for the next two to five years. The key revisions for the period 2025-2028 include a reduction in primary supply by 2% on average, which is a result of various company announcements to defer growth or restructure production due to deteriorating profitability caused by lower prices of palladium and rhodium. Secondary supply is forecasted to be 6% lower on average due to lower scrap supply caused by longer vehicle lifecycles. Automotive demand is expected to be 11% lower on average due to changes in the drivetrain mix and the substitution of palladium for platinum starting in 2026. On the other hand, industrial demand is projected to be 1% higher on average, driven by increased demand in the chemical and glass sectors offsetting decreases in the petroleum and electrical sectors. Investment demand is forecasted to be 30 koz lower on average based on previous annual demand data.