Platinum’s positive price seasonality may be accentuated by recycling supply risks through early 2025

Over the past 25 years, the platinum price has shown the strongest positive price seasonality from December to February. This tends to correspond with buyers finalising procurement plans for the upcoming year and seasonally weak mining output at the start of the year as South African miners return from their year-end breaks. Mine supply seasonality is likely to persist in 2025. However, it may be accentuated if recycling supply fails to perform as per our latest Platinum Quarterly (link) where large increases in recycled supply over Q4 2024 and 2025f are forecast. Whilst these are our base case forecasts we have highlighted that they are subject to significant risks.

An analysis of monthly platinum price returns over the past 25 years shows that the platinum price has on average performed most strongly over the months of January and February followed by December (Fig. 1). Historically, the average compound return over the three months from December to February has been 8.6%. In contrast, platinum’s price performance seasonality has been more lacklustre through the middle of the year before picking up again in the final months of the year.

Platinum’s price seasonality is commonly attributed to seasonal mine supply. Refined mine supply seasonality stems from South African miners returning from their year-end holiday break, which depresses first quarter output. Global mined platinum supply averages 154 koz lower (~10%) in the first quarter than quarterly production over the rest of the year (Fig. 2).

Fig 1. Platinum price performance is seasonally strong from December through to February

Fig 2. Seasonally weak first quarter platinum production underpins positive price performance

In combination with recent restructuring activities, mine supply should remain seasonally depressed in Q1 2025, likely supporting platinum prices. 

This year, the automotive recycling value chain could compound seasonaility. We note that the WPIC’s intial annual recycled platinum supply forecasts for 2022 and 2023 (typically published in the preceding November) were subsequently lowered by 13% and 11% respectively as spent autocatalyst shortages emerged across the supply chain (Fig. 4). So far in 2024, quarterly recycled autocatalyst supply has been in the lower quartile of supply over the past ten-years (Fig. 5). However, Q4 2024f supply is forecast to increase by 32% QoQ, despite historic data showing no evidence of recycling typically picking up in the fourth quarter (other than during 2020 where pent up stock was released after COVID lockdowns). Should Q4 2024f mirror historic quarterly seasonality, full year 2024f supply could be ~50 koz lower. Similarly, the ongoing challenges facing recycling supply may put in question the forecast for recycling supply to increase by 12% YoY in 2025f. Should Q4’24 and Q1’25 recycling volumes fall short of expectations it could potentially accentuate platinum price seasonaility from December to February. 

Figure 3: Monthly returns for platinum price performance. The platinum price has exhibited strong seasonality over the past 25 years with compounded average returns of almost 7% for January and February combined.

Figure 4: Persistent supply chain challenges have led to initial annual forecast for recycled platinum supply to be downgrade in 2022 and 2023

Figure 5: WPIC’s 2024f recycled platinum supply forecast relies on sharp quarterly growth in recycled autocatalyst supply in Q4 which has not historically been seasonally evident

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