World Platinum Investment Council: It is anticipated that there will be a deficit of 539,000 ounces in the platinum market by 2025, marking the third consecutive year of market shortages.

In 2025, WPIC Platinum Investment predicts that platinum will face market shortages for the third consecutive year. The projected platinum market shortage for 2024 is estimated at 682,000 ounces, decreasing to 539,000 ounces in 2025. The diverse uses of platinum in various end markets are key factors supporting the continuous occurrence of market shortages for this metal. Compared to 2024, the forecast for 2025 anticipates increased demand for automobiles, jewelry, and investments, which will overall offset the periodic weakness in industrial platinum demand in 2025. In fact, it is predicted that the demand for platinum in automobiles will reach the highest level in 8 years in 2025. The estimated platinum supply for 2024 has also been adjusted upwards, reflecting the release of inventory in South African platinum mines' production. Overall, it is forecasted that platinum supply in 2025 will remain stable as growth in recycling offsets the shrinking in mineral supply. The platinum shortage in 2024 is reduced to 682,000 ounces, accounting for 9% of the forecasted annual demand. Looking ahead to 2024, the platinum shortage is estimated to be 682,000 ounces, a decrease of 347,000 ounces from the previous issue of the Platinum Quarterly. The updated platinum market deficit reflects expectations of increased supply and decreased demand. The total supply of platinum in 2024 is expected to increase by 2% year-on-year, reaching 7.269 million ounces. The total supply has been raised by 180,000 ounces, mainly due to higher-than-expected refined production levels from South Africa and Russia. These two countries' producers have each increased annual production expectations by releasing semi-finished goods inventories and accelerating equipment maintenance. The total demand for platinum in 2024 is estimated at 7.951 million ounces, remaining relatively flat compared to 2023. However, demand expectations have been lowered by 166,000 ounces, mainly reflecting the outflow of platinum stocks held by exchanges (a decrease of 85,000 ounces) and a reduction in automobile demand (a decrease of 64,000 ounces) due to weak car sales, rather than an acceleration in the electrification of propulsion systems. 2025 Outlook: Expected to see a significant platinum market shortage for the third time The platinum market in 2025 is expected to face a deficit of 539,000 ounces. This deficit accounts for 7% of the platinum demand in 2025, and the market is not expected to see significant changes in total supply (up 1% year-on-year) and total demand (down 1% year-on-year). Platinum supply in 2025 is expected to increase by 55,000 ounces, reaching 732,400 ounces. Recycling supply for auto catalysts is expected to increase by 170,000 ounces, reaching 1.346 million ounces, a 14% year-on-year increase, which will support the overall growth in platinum supply. On the other hand, mineral supply is expected to decrease by 133,000 ounces in 2025, a 2% decrease year-on-year, as the restructuring effects in South Africa and North America from 2024 start to reflect in production. Platinum total demand in 2025 is expected to decrease by 88,000 ounces, reaching 786.3 million ounces. While demand for automobiles, jewelry, and investments is expected to increase, the 2025 demand will be affected by a 9% year-on-year decrease in industrial demand, mainly due to the lack of significant increase in new glass production capacity. Platinum supply and demand - Third quarter results and insights for full year 2024 and 2025 A surplus of 260,000 ounces was reported in the third quarter of 2024, mainly due to platinum ETF sales. In the third quarter of 2024, platinum demand reached its lowest point in two years, dropping to 1.567 million ounces, primarily due to ETF redemptions of 300,000 ounces. ETF investors seemed to close out profits in this quarter as the platinum price retraced gains from the second quarter of 2024. On the other hand, automotive platinum demand decreased by 3% year-on-year in the third quarter of 2024. It is worth noting that the decline in automotive demand does not reflect a change in trends in propulsion systems discussed earlier. The growth rate of demand for battery electric vehicles (BEVs) continued to slow down. Demand for hybrid vehicles remained strong, while demand for pure internal combustion engine (ICE) vehicles slowly declined. The weakness in the third quarter mainly reflected the weakness in the European market, where issues with vehicle ownership costs impacted the new car market, offsetting growth in other regions. On the other hand, platinum demand in jewelry and industrial sectors increased year-on-year, partially offsetting the decline in automotive platinum demand. Platinum total supply in the third quarter of 2024 increased by 5% year-on-year. Mineral supply increased by 7% year-on-year, reaching 1.479 million ounces, primarily driven by South Africa. The country benefited from improved smelter availability and reduced power shortages, which together drove the release of semi-finished goods inventories and were sufficient to offset some processing capacity constraints in Zimbabwe. In Russia, planned smelter rec The net impact above resulted in a surplus of 260,000 ounces in the market in the third quarter of 2024, ending two previous quarters of shortages close to 500,000 ounces. 2024 updated outlook - Platinum market shortage at 682,000 ounces, 9% of demand The projected platinum deficit for the full year 2024 is 682,000 ounces, lower than the 759,000 ounces deficit reported in 2023, as supply growth moderately exceeded demand growth (1.5% and 0.4% year-on-year growth respectively). The outlook for mineral supply for the full year 2024 is expected to increase by 1% year-on-year, reaching 5.683 million ounces. Compared to the previous issue of the Platinum Quarterly, the mineral supply has been raised by 175,000 ounces, reflecting the reduction in semi-finished metal inventory in South Africa and the minimal impact of planned smelter maintenance in Russia. It is worth noting that South Africa addressed power supply constraints in 2022 and 2023 primarily by adjusting smelter utilization rates. With mining companies benefiting from stable electricity supply, smelter availability has improved. This, along with the reduction in power shortages, has contributed to the release of semi-finished goods inventories. The adjustment in recycling supply volume is small, and is expected to be consistent with the previous year. Although automotive catalyst recycling volumes increased by 2% year-on-year, market feedback remains mixed, with some smaller scrapyards preferring to retain materials in anticipation of price increases due to a soft new car market, while other regions see material supply as tight. 20242650 Driven in part by limited supply of scrapped catalytic converters entering refining facilities, the total supply is expected to increase by 3% to reach 726.9 ounces by the year 2023. In 2024, the total platinum demand has been revised down by 166,000 ounces from the September forecast, to 795.1 million ounces, an increase of 33,000 ounces from 2023. It is expected that automotive demand will decrease by 2% year-on-year to 317.3 million ounces. The reason for the decrease in automotive demand is due to reduced vehicle production expectations and cost pressures negatively impacting automotive sales and production, especially in the European market. However, the theme of the continued long-term demand for internal combustion engines (ICE) due to the slowdown in battery electric vehicles (BEV) growth remains unchanged. Revised expectations for 2024 BEV market share have been reduced from the initial forecast of 15% to 13% (2023: 12%, according to Global Data). Investment demand is expected to be 393,000 ounces, a decrease of 124,000 ounces from the previous Platinum Quarterly, mainly due to platinum inventory outflows from exchanges. Other trends in 2024 remain largely unchanged, with weaker demand for platinum bars and coins offset by fund inflows into platinum ETFs. Industrial platinum demand in 2024 is expected to decrease by 1%, primarily due to reduced start-up of new chemical factories in China. This impact will be partially offset by the start-up of new capacity in the glass industry. In the jewelry sector, total platinum demand in 2024 is expected to grow by 5% compared to 2023. Combining the increase in supply and the decrease in demand, the forecasted platinum market deficit for 2024 has decreased from 102.8 thousand ounces in the previous Platinum Quarterly to 68.2 thousand ounces. Preliminary forecast for 2025 - Third consecutive year of market shortages, further depletion of above-ground stocks Some trends from the past two years are expected to continue into 2025. Supply of platinum is expected to remain weak, as mineral production declines offset recycling growth. Total platinum demand will remain resilient, benefiting from platinum's diverse applications in multiple end markets. It is expected that automotive, jewelry, and investment demand will all achieve single-digit growth in 2025, collectively helping to mitigate the cyclical weakness in industrial platinum demand, primarily affected by the timing of glass capacity expansion. Given the combination of weak supply and low demand, the platinum market is expected to experience a significant deficit in 2025, estimated at 53.9 thousand ounces, accounting for 7% of demand.May benefit in the midterm.Focused on the automotive industry, it is expected that platinum demand will decrease by 2% year-on-year in 2024, and increase by 2% in 2025. The trend in automotive driving systems still reflects a slowing growth in BEV demand, as consumers are more inclined towards choosing hybrid vehicles as an intermediate electrification solution. The global passenger BEV market share is expected to increase from 12% in 2023 to 13% in 2024, with a moderate growth rate. It is worth noting that the demand growth rate for BEVs is expected to accelerate again in 2025. With the introduction of cheaper BEV models and overall fleet carbon emission targets penalizing internal combustion engine models, BEV production is projected to increase by 31% year-on-year. Although recent history has shown a downside risk in the growth rate of BEVs, the negative impact on the production of internal combustion engine passenger vehicles (including hybrid vehicles) is expected to be minimal, with production expected to decrease by only 2 million vehicles in 2025, from 80 million to 78 million. The decline in production will be partially offset by automotive hybridization (which uses more platinum group metals) and continued use of platinum as a substitute for palladium. Furthermore, the growth in the heavy-duty vehicle (HDV) market in 2025 will further promote platinum demand, benefiting from lower financing costs. Regarding industrial platinum demand, despite high global interest rates and increasing economic uncertainty, the end-market remains robust. Industrial platinum demand in 2025 is expected to decrease by 9% year-on-year, primarily due to the timing of investments in the glass industry and factory startups. The previously anticipated increase in glass capacity in 2025 is now expected to start up in the fourth quarter of 2024. As a result, platinum demand in the glass industry in 2025 will decline from the second highest level in history in 2024 to the lowest level since 2019. Excluding the glass industry, industrial demand is expected to increase by 9% year-on-year in 2025, driven mainly by double-digit growth in the chemicals, petroleum, fixed hydrogen equipment, and other sectors. On the demand side of the platinum investment logic, platinum jewelry demand is expected to continue to recover, coming out from a low point in 2023, with 2025 projected to be the second consecutive year of growth. Platinum jewelry demand in China is expected to recover in 2025, and the Indian market will also continue to grow. With the rise in gold prices, price-sensitive consumers are turning to platinum, considering it to have a better value for money. Investment demand may experience unexpected growth, as platinum becomes more attractive as a zero-yield asset with declining interest rates due to improving market sentiment. Furthermore, market expansion activities have made platinum bars and coins more accessible for investment. It is worth noting that Costco in the United States has introduced platinum bar sales, and the China Gold Coin Group (CGCG) has launched more platinum products in China. Another key component of the platinum investment logic is its uncertain supply outlook. In the past 12 months, platinum miners have announced some restructuring measures, including layoffs, cutting unprofitable supplies, and delaying future growth and replacement projects. Mineral supply is expected to be 5.55 million ounces in 2025, about 577,000 ounces lower than the average annual supply between 2015 and 2019. Although the restructuring is expected to be completed by the end of 2024, the fundamental reasons for the restructuring have not changed. Although the basket price of platinum group metals priced in the South African Rand (ZAR) has been stable for a year, the price is still too low to stimulate new investments. With mining inflation expected to push up production costs, more measures are needed to support the financial sustainability of the industry. Therefore, the WPIC believes that the risk of platinum supply remains high. Overall, investor sentiment appears to be improving, attracted by strengthening fundamentals. Although price reactions have not yet occurred, the long-term strong demand for automotive and ongoing supply challenges have led to deficits in the market, resulting in above-ground stocks becoming the final source of supply. It is expected that these stocks will decrease by 40% between 2022 and 2025, ultimately helping to tighten the spot market and drive platinum prices higher.