2024 Platinum Market Expected to Face Severe Supply Shortage

2024 Platinum Market Overview

The global platinum market is set to encounter a notable deficit in 2024, projected to exceed one million ounces. This anticipated shortfall arises from a combination of declining supply and increasing demand, particularly in investment and jewellery sectors. Supply is expected to weaken by 1%, down to 7,089 koz, which is significantly below the five-year average. In contrast, total demand is forecasted to grow by 3%, reaching up to 8,118 koz.

Investment Demand Insights

Investment demand for platinum is projected to hit 517 koz in 2024. This growth is attributed to inflows into Exchange-Traded Funds (ETFs) and substantial increases in bar and coin purchases, especially in large bullion bars (500g and above) within the market. The data suggests that such demand in recent quarters has more than compensated for declines in other areas of investment, showcasing the shifting dynamics of platinum purchasing behavior.

Jewellery Demand Growth

Jewellery demand for platinum is experiencing a resurgence, with a notable increase driven by high gold prices which create a larger price gap. This quarter, global platinum jewellery demand crossed the benchmark of 500 koz for the first time since late 2021, reflecting a year-on-year uplift of 5%. As platinum continues to gain traction in markets like India and the West, this trend is expected to bolster overall demand significantly.

Industrial Demand and Automotive Sector Performance

On the industrial front, demand is also projected to see positive growth, increasing by 1% year-on-year. Noteworthy is the 47% rise in demand for glass, largely influenced by expansions in the LCD sector. Meanwhile, automotive demand for platinum is set to rise by 1% in 2024, alongside increasing production of hybrid vehicles which leverage platinum's unique properties.

Market Dynamics and Future Trends

Despite these encouraging trends within the market, the overall supply for platinum is expected to fall further, continuing challenges from mining reductions particularly in major producing regions. This presents a complex landscape for 2024 where demand outstrips supply, leading to heightened prices amidst constrained availability.

Conclusion and Market Outlook

As we look ahead, the platinum market's trajectory seems set on a path towards persistent deficits fueled by strong demand across various sectors. The World Platinum Investment Council (WPIC) sees these trends as indicative of a market that is slowly evolving, with an increased focus on platinum’s potential in emerging sectors such as hydrogen production, which is increasingly catching the attention of global investors.

Frequently Asked Questions

What is driving the platinum market deficit in 2024?

The deficit is primarily driven by a combination of weak supply forecasts and increasing demand, particularly in investment and jewellery.

How much is the investment demand for platinum expected to grow?

Investment demand for platinum is projected to reach 517 koz, reflecting a significant year-on-year increase.

Which sectors are influencing platinum demand growth?

Investment, jewellery, and industrial sectors are key contributors to the growth in platinum demand, with expanding applications in various industries.

What challenges does platinum supply face in 2024?

Platinum supply is expected to decline further due to restructuring within major production regions, including South Africa, impacting mined output.

What role does platinum play in the hydrogen economy?

Platinum is increasingly recognized for its importance in hydrogen production, with significant government incentives expected to boost demand in this sector.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

Disclaimer: The content of this article is solely for general informational purposes only; it does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice; the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. The author's interpretation of publicly available data shapes the opinions presented here; as a result, they should not be taken as advice to purchase, sell, or hold any securities mentioned or any other investments. The author does not guarantee the accuracy, completeness, or timeliness of any material, providing it "as is." Information and market conditions may change; past performance is not indicative of future outcomes. If any of the material offered here is inaccurate, please contact us for corrections.