Platinum demand, deficit to grow in 2021

The World Platinum Investment Council (WPIC) saw demand for platinum to grow in the first quarter, but there will be an annual supply deficit, the third in a row, in 2021. The outlook was detailed in the Council’s Platinum Quarterly, published on May 17.

The first quarter saw the fourth consecutive quarterly supply deficit of about 19,000 oz., Demand should be 5% higher this year than last, but there will still be an annual deficit of approximately 158,000 oz. even as supply grows.

The Council noted: “As the global economy continued to recover, boosted by widespread stimulus measures, Q1 2021 saw demand for platinum increase by 26% year-on-year to 1.97 million oz. Following the effects of operational shutdowns and Covid restrictions in 2020, greater output from South Africa, an increase from Russia and growth in recycling saw total supply growing 11% to 1.95 million oz. in Q1 2021. While total supply is forecast to rise 16% to 7.99 million oz. in 2021, this is still some way off levels seen pre-pandemic (8.2 million oz. in 2019).”

Increased demand in the first quarter came from industrial, automotive and jewellery sectors swinging toward recovery. Industrial demand rose 44%, underpinned by a six-fold increase year-over-year from the glass sector. Automotive demand is forecast to exceed 2019 levels, despite supply chain problems; it was up 8% in the first quarter. Platinum jewellery demand was up by 22%, with fabrication increases in China, India and North America.

Investment demand for platinum re strong – up 96% to 140,000 oz. in Q1 2021, compared to Q1 2020. For the year, investment is expected to be 726,000 oz., on par with the last five years.

WPIC CEO Paul Wilson said, “Today’s report points to the fact that platinum demand and supply sectors are poised to benefit from this rapid [economic] recovery and support. In addition to stimulus packages, climate action is now heavily featured on many governments’ agendas, adding further impetus to the attraction of green technology metals such as platinum. Manufacturing sectors gaining momentum will increase platinum consumption, and in turn this will stimulate investment activity – for both short- and long-term investors.”

Find the supply-demand numbers on www.PlatinumInvestment.com in the May 17 news release.