The World Platinum Investment Council - WPIC® - today publishes its Platinum Quarterly for the second quarter of 2024 and a revised full year 2024 forecast.
Global platinum demand in Q2’24 rose 13% year-on-year to 2,421 koz. This increase was driven by robust growth in the investment (+137% year-on-year) and jewellery (+5%) sectors, complementing stable demand from the automotive and industrial segments. On the supply side, despite growth in mine production and a stabilisation in secondary supply, total global supply, at 1,958 koz, fell well short of demand, resulting in a 464 koz deficit.
For the full year, total platinum supply is expected to decline by 1% from the already weak levels of 2023, reaching 7,089 koz. While recycled supply is forecast to see a modest year-on- year increase of 2% to 1,581 koz, this gain will be offset by a 2% year-on-year decrease in mined supply, which is projected to drop to 5,508 koz. On the demand side, robust growth is expected to drive total demand to 8,118 koz, leading to a substantial market deficit of 1,028 koz in 2024.
Investment demand projected to reach 517 koz in 2024
It is important to note that, for the first time, the Q2’24 Platinum Quarterly report includes an expanded scope that accounts for purchases of bullion bars, 500g and above, in China, made possible by access to more granular market data. In Q2’24, these purchases doubled from Q2’23 levels, reaching 41 koz, and are expected to achieve 40% year-on-year growth for full year 2024, reaching 188 koz.
During Q2’24 investment demand surged to its highest level since Q3’20, driven by a substantial inflow of 444 koz into platinum ETFs. This strong ETF performance, along with large bar (500g and above) demand in China, more than offset a sharp 63% decline in bar and coin investment, which fell to 17 koz due to net disinvestment in Japan and reduced buying in North America. Exchange-held stocks decreased by 40 koz to 174 koz.
Total investment demand in 2024 is projected to reach 517 koz, marking a 15% year-on-year increase. Platinum ETF holdings are expected to increase by 150 koz (albeit a reduction on the inflows seen during Q2’24). Strong growth in physical investment in China, especially in the large bar (500g and above) category, will more than offset weak bar and coin demand elsewhere.
Platinum jewellery demand set to increase 7% driven by high gold prices
This quarter, global platinum jewellery demand surpassed 500 koz for the first time since Q4’ 21, marking a 5% year-on-year increase, aided by the widening price gap between platinum and gold. Platinum jewellery fabrication in India surged 15% year-on-year, fuelled by strong exports to the US, UK, and UAE, while fabrication in Europe and China increased 7% and 5%, respectively.
For full year 2024, historically high gold prices will help platinum jewellery demand grow by a projected 7% (+126 koz) year-on-year, reaching 1,994 koz. In India, jewellery fabrication is expected to demonstrate further strong growth with a 28% increase, while Japan's demand is forecast to rise by 8% year-on-year to 365 koz, the highest level since 2019. Offtake in Europe is expected to reach a record high in our time-series, growing 4%. Meanwhile, demand in North America this year is also projected to reach a record high, growing 3%. Notably, fabrication in China is set to improve by 3%, reversing a decline in demand that has persisted since 2013.
Robust industrial demand boosted by 47% increase in glass demand
Industrial demand is forecast to reach 2,369 koz in 2024, marking a 1% year-on-year increase over the elevated levels of 2023. Glass demand in Q2 2024 increased by 48% year-on-year to 216 koz, due to Chinese LCD capacity expansions that were delayed from 2023. As a result, a 47% year-on-year increase in glass demand is expected for full year 2024.
Demand in the medical sector (+4% to 303 koz) and for hydrogen-based applications (+123% to 64 koz) is projected to rise year-on-year in 2024. Meanwhile, petroleum demand will soften (-3% to 153 koz), while electrical (+1% to 90 koz), and other industrial sectors (+2% to 582 koz) are expected to show modest year-on-year growth.
Overall, gains will offset a sharp decline in platinum chemical offtake, which dropped 48% year- on-year (-111 koz) to 122 koz in Q2’24, primarily due to a slowdown in China's petrochemical industry. For the full year, chemical demand is expected to decrease by 31%, to 542 koz.
Automotive demand to increase 1% in 2024, despite fall in vehicle production
In Q2’24, global automotive platinum demand increased by 1% (+6 koz) to 820 koz, driven by a higher share of hybrid vehicles and the expanded use of platinum-rich trimetallic catalysts, particularly in North America.
Automotive platinum demand in 2024 is forecast to reach a seven-year high, growing by 1% year-on-year to 3,237 koz, despite a downward revision in global vehicle production estimates to 91.1 million units. This growth continues to be underpinned by softer consumer demand for battery electric vehicles (BEVs) and the continuation of growth in hybrid vehicle numbers, alongside stricter emissions legislation and an increase in platinum-for-palladium substitution, which is forecast to reach 752 koz this year.
Total supply in 2024 to fall a further 1%, despite 4% pickup in Q2
Refined mine supply in Q2’24 saw a 4% year-on-year increase, reaching 1,540 koz, thanks largely to a 7% increase in output from South Africa, offsetting declines in other regions.
However, for full year 2024, cost-driven restructuring in South Africa is expected to result in a 2% year-on-year reduction in the country’s mined supply, which is forecast to fall to 3,883 koz. This, coupled with forecast declines in Russian output, is expected to lead to a 2% decrease in total mined platinum supply, falling to 5,508 koz, a four-year low.
Meanwhile, global recycling remained supressed in Q2’24, with only a 1% year-on-year increase (+4 koz), driven by a slight rise in spent autocatalyst recycling, offsetting declines in jewellery and electronic scrap. Recycling is expected to reach 1,581 koz for the full year, a 2% year-on-year increase, with the spent autocatalyst market expected to show some signs of stabilising after two years of declines, supported by improvements in the factors that previously disrupted the flow of materials from consumers to scrapyards and from scrapyards to refiners.
Finally, above ground stocks are forecast to decline for the second year in succession, with a 25% decline to 3,006 koz, hitting a four-year low and resulting in just over four months’ worth of demand cover.