Platinum Essentials

6 February 2025: Jan‘25, Five-year supply/demand outlook; platinum deficits persist, palladium’s are deeper and last longer. January 2025 Platinum Essentials: Five-year supply/demand outlook; platinum deficits persist, palladium’s are deeper and last longer. With our Platinum Quarterly now running through 2025, this Platinum Essentials contains revised estimates for platinum supply and demand balances in the years 2026 to 2028 and our first estimate for 2029. The material platinum market deficits established during 2023 and 2024 are set to persist throughout the forecast period through 2029f. WPIC expects the consecutive platinum market deficits to average 689 koz pa from 2026 to 2029, or approximately 9% of annual demand. Within our updated palladium forecasts to 2029f, we expect market deficits to last until 2027f (previously 2025f) before market surpluses gradually build from 2028f. Given ongoing uncertainties, this report does not fully capture the impact of Trump’s policies on PGM demand, but we do not expect them to be of sufficient magnitude to materially change the platinum and palladium deficits laid out herein.

16 January 2025: Jewellery market growth returns as China’s decline halts, strong ex-China growth continues and platinum’s discount to gold results in price parity with white gold. 16 January 2025: Jewellery market growth returns as China’s decline halts, strong ex-China growth continues and platinum’s discount to gold results in price parity with white gold: After a decade of declining platinum jewellery demand, the market appears to have troughed and we are forecasting future growth in demand at a 2% CAGR through 2028. Furthermore, several emerging factors add upside potential to demand. These include price linked switching from white-gold, which is approaching price parity with platinum at the consumer level, technology advancements in platinum alloys lowering production costs, and the increasing availability of price risk management tools.

29 October 2024: WPIC’s platinum price attribution model examines the factors that establish platinum value in the market. October 2024: WPIC’s platinum price attribution model examines the factors that establish platinum value in the market: A key question market participants are asking is why hasn’t the platinum price reacted to recent market deficits? In response the WPIC has developed a Platinum Price Attribution Model to explain what key observable variables can be utilised as indicators to explain price movements. The key conclusions are that the main price influencing factors evolve over time, and that since 2011, market-economic and sentiment factors have had higher influence than fundamentals. Looking ahead, we expect underlying fundamentals, reflected as market deficits, to return to being the most important price setting factor.

18 October 2024: Sep‘24, 2-5 year platinum supply/demand outlook: Robust demand and limited supply drive larger market deficits. September 2024 Platinum Essentials: Updating WPIC’s two- to five-year platinum supply demand outlook: Robust demand and limited supply drive larger market deficits. This Platinum Essentials contains revised platinum supply/demand estimates for 2025f to 2028f. The platinum investment case remains compelling, with the overriding feature being that the substantial market deficits of 2023 and 2024f are expected to persist throughout our forecast period to 2028f. This report is separate to the one-year forward outlook for 2024 we publish in our Platinum Quarterly (PQ), which is prepared independently for us by Metals Focus.

31 July 2024: The slowdown in BEV market growth is driving investor interest in platinum on a higher-for-longer ICE automotive thesis; are budget BEVs a threat to this outlook? Despite some future BEVs mooted to achieve €25,000 prices (or below), we do not expect these to lift overall declining BEV growth as they account for only 15% of new car listings in developed economies and are ultimately less cost-effective for a cohort of buyers that typically do not have access to cheaper at-home charging. This reports highlights that striving for an affordable price does not implicitly imply “price parity” with ICE/hybrid vehicles and that cumulatively 2E PGM automotive demand erosion of 1.4% CAGR between 2023 to 2028f will prove more resilient than many would have expected.

29 May 2024: Updated palladium supply/demand outlook: Reduced supply and stronger near-term demand prolong larger deficits. In this Platinum Essentials we present our palladium supply/demand estimates for 2024 to 2028. Our analysis reaffirms an expectation that palladium markets will transition to sustained market surpluses, but timing is highly contingent upon the recovery of palladium recycling supply. Initially, we project tightening deficits for 2024 and 2025, moving to surpluses from 2026, driven by a significant increase in palladium recycling supply of over 1.3 Moz p.a. by 2028. The surplus is delayed by one year compared to our previous forecast, due to more resilient automotive demand and a slower-than-expected recovery in autocatalyst recycling. Any delays to solving these issues could easily slow the pace of the growth in recycling supply, resulting in deeper and more persistent deficits and further postpone the surplus.

30 April 2024: Unpacking the economics of the hydrogen economy reinforces conviction that platinum demand will benefit from a major new emerging end-market. WPIC expects hydrogen end-uses to account for 11% of total annual platinum demand by 2030 (~875 koz). Platinum’s largest opportunity within the hydrogen economy lies with fuel cell electric vehicles (FCEV), particularly heavy-duty. While initial FCEV adoption has been slow, the economic hurdles are receding with HD FCEVs projected to reach cost parity with diesel by 2030 in Europe and China. Accordingly, we expect that the HD FCEV market share will increase to 5% by 2030. This results in platinum demand growth from hydrogen end markets, which almost offsets declining autocatalyst demand leaving platinum markets in consecutive deficits of around 430 koz on average between 2025 to 2028.

1 April 2024: Hydrogen 101 – An introduction for investors. This 101 report unpacks and explains hydrogen and the hydrogen economy as well as the important role played by platinum in the production and use of hydrogen. Hydrogen serves as a versatile energy carrier, capable of being produced from renewable energy sources and applied across various mobility and industrial sectors to facilitate decarbonisation. Platinum and other PGMs are set to play a pivotal role through their inclusion in electrolysers and Proton Exchange Membrane (PEM) fuel cells. Recognising hydrogen's pivotal role in achieving net-zero emissions, its integration into various sectors is inevitable.

1 December 2023: Platinum’s consecutive market deficits could deepen as lower PGM prices increase mine supply risks. The >40% decline in the Platinum Group Metals (PGMs) basket price over the last twelve months has materially undermined the economic sustainability of a significant portion of platinum mining supply. WPIC estimates around 25% of PGM mine production is generating negative margins. Should efforts to stem loss-making production result in production being suspended or closed, they will compound projected platinum market deficits, which are forecast to average 8% of demand between 2023f to 2027f, before capacity rationalisation. The combination of largely inelastic demand and risks to uneconomic supply being curtailed have the potential to exacerbate deficits and tighten market conditions, enhancing the investment case for platinum.

1 September 2023: Palladium’s five-year supply/demand outlook and its role in liberating platinum for the hydrogen economy. This report introduces WPIC’s five-year palladium outlook, supplementing our platinum projections to 2027. We forecast palladium deficits in 2023 and 2024 before increasing recycling supply and flat demand move palladium into surpluses from 2025. In contrast, we expect multi-year deficits for platinum from 2023. We expect ongoing platinum for palladium substitution in automotive end uses to reverse from 2025, supporting palladium demand and freeing up platinum for the hydrogen economy.