Platinum Market Dynamics Q3, 2023

In a World Platinum Investment Council report, it is said that, the Q3 2023 deficit of 40 koz on increasing automotive, industrial and investment demand The third quarter of 2023 saw a consolidation of several demand themes across the platinum market, with supply remaining constrained, and demand robust, with the exception of some weakness in the investment markets.

Mining supply increased by 2% year-on-year to 1,418 koz in Q3’23, underpinned by Southern Africa. South African production increased by 19 koz to 996 koz and Zimbabwean output increased by 13 koz in the third quarter. South African production represented the first quarterly of year-on-year growth since Q4’21 and was led by better management of load curtailment and less downstream processing capacity downtime. Elsewhere, producers decreased inventories during Q3’23 leading to an 18 koz net increase in platinum supply.

Russian production decreased year-on-year but, was ahead of expectations as downstream maintenance has been deferred to 2024. Recycling supply has not appeared to benefit from increasing new vehicle sales through 2023. Lower end-of-life vehicle availability appears attributable to the longer running of vehicles as mileage decreased during the Covid pandemic. Furthermore, reports of scrapyards holding out for higher metals prices may be restricting spent autocatalyst availability.

Total supply in Q3’23 of 1,770 koz was down 2% year-on-year and 3% quarter-on-quarter. Total demand for Q3’23 was robust at 1,810 koz, up 24% year-on-year. Demand benefitted from a 14% year-on-year increase in automotive platinum demand and reduced selling of platinum investment products (11 koz versus 260 koz in Q3’22).

Automotive demand growth was underpinned by platinum for palladium substitution, growing vehicle numbers and higher platinum group metal loadings due to tighter emissions legislation. Platinum demand was negligibly impacted by labour disputes amongst North American automakers. Industrial demand rose by 6% year-on-year highlighting the ongoing strength in demand from multiple end use segments. Jewellery demand fell 5% year-on-year mainly due to ongoing weakness in China, albeit there are tentative signs that Chinese platinum jewellery demand has been stabilising over the past four quarters. The net impact was a quarterly deficit of 40 koz in Q3’23, which represents a third consecutive quarterly deficit.

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