The platinum market faces its largest supply shortfall in 10 years in 2024 as shipments from Russia return to normal from last year’s highs and industrial demand stays firm, Johnson Matthey said in a report on Thursday.
The autocatalyst maker added that it expected all platinum
group metals (PGM) – platinum, palladium, and rhodium – to remain in deficit in
2024.
The three metals are used in autocatalysts that reduce
emissions from vehicle engines, with platinum also used in other industry and
for jewellery and investment.
Johnson Matthey (JM) said it expected the platinum market’s
deficit to increase to 598,000 ounces this year from a shortfall of 518,000
ounces in 2023.
It forecast platinum demand would stabilize at around 7.61
million ounces, with small decreases in automotive and jewellery balanced by an
uptick in investment.
Auto sector consumption is expected to slip 1.3% in 2024, while primary supply is projected to fall 2% as Russian shipments return to more normal levels following heavy selling of mined stocks in 2023, JM said.
For palladium, JM said use by automakers would fall about
7%, reducing overall demand to 9.73 million ounces and cutting the market
deficit to 358,000 ounces from 1.02 million ounces last year.
For rhodium, auto consumption is also expected to fall – by
about 6% – dragging total demand down 4% to 1.06 million ounces. The rhodium
market is likely to be undersupplied by 65,000 ounces, down from 125,000 ounces
in 2023, JM said.
“Automotive and industrial users bought more metal than they
needed during 2020-2022 to mitigate price and supply risks. Since then,
consumers have been using up excess PGM inventory, and some have even sold
metal back to the market,” Rupen Raithatha, market research director at Johnson
Matthey, said.
At around $950 an ounce, palladium is trading lower than
platinum at $960, pressured by growing demand concerns.
Rhodium is trading around $4,700 an ounce, down about 84%
from all-time highs reached in March 2021.