Contact us
CALL US NOW 1-888-GOLD-160

Industrial Demand for Platinum Driving Significant Supply Shortfall

  by    0   0

The world faces a significant platinum supply shortfall due to record industrial demand.

According to a report by the World Platinum Investment Council (WPIC), the platinum market faces a 1.07-million-ounce deficit in 2023. The supply shortfall is expected to extend into 2024.

With two years of significant market deficits, we will likely see upper pressure on platinum prices.

Platinum is one of the rarest metals in the world. Only 0.005 ppm (parts per million) can be found on the Earth. That compares to gold at 0.004 ppm and silver at 0.075 ppm.

In its third-quarter report, the WPIC raised its forecast 2023 deficit by 66 million ounces from its Q2 estimate. This reflects a 3% decline in total supply and a 26% increase in demand versus 2022.

The WPIC projects industrial demand will grow by 317,000 ounces in 2023, totaling 2.652 million ounces. That represents a 14% year-on-year increase and would be the biggest offtake on record.

Demand in the green energy sector is driving the increase and straining platinum supplies. Wind turbine producers use platinum-based glass fibers to minimize the weight of rotor blades, making them more efficient.

WPIC head of research Edward Sterck told Kitco News, “We are seeing more and more uses for glass fibers that will continue to drive industrial demand. The green energy transition is expected to provide long-term support for platinum.”

The automotive industry also uses platinum, specifically as a component in catalytic converters. The WPIC said it expects automotive demand to rise to a six-year high of 3.262 million ounces, an increase of 14% year on year.

The WPIC also projects stronger investment demand for platinum with an increase to 305,000 ounces this year That would represent a 36% jump from 2022.

The only demand downside for the metal is in the jewelry market with a projected 3% decline this year.

On the supply side, the WPIC forecasts mine output will remain flat. Mine supply is down 8% from the pre-Covid five-year average.

Sterk told Kitco News that the preliminary estimates for 2024 point to a continued supply and demand imbalance. The WPIC forecasts a 353,000-ounce deficit in 2024. Weak supply growth simply can’t keep pace with strong, growing demand.

The WPIC is factoring in a recession in 2024. This will dampen industrial demand, but Sterk said government programs will continue to support the green energy sector and provide support for demand even with an economic downturn.

Sterk said investors have been sitting on the sidelines and may well miss the first big leg up in the price of platinum.

Right now, investors are sitting here just waiting. They want to commit themselves, but they need to see some kind of trigger that gets them into the market, and I think that will be higher prices. At this point, investors are almost prepared to miss the beginning of that move in order to have confidence in the future trajectory. The message in today’s report is that with two years of market deficits, above-ground stocks have been severely depleted, and we expect the underlying fundamental backdrop should start to reflect in the price.”

SchiffGold offers the most popular platinum and palladium coins produced by well-known national mints – the US American Eagle and the Canadian Maple Leaf. It can easily supply any other platinum or palladium products you desire.

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Which Central Banks Are Selling Gold?

Central bank gold buying has been a significant factor in the yellow metal’s spectacular run-up to new record highs. But with its recent small correction downward, it’s a good time to look at which central banks are selling — and why.


Death of Iranian President Carries Gold, Copper to New Record Highs

Amid ongoing tension in the Middle East, Iranian President Ebrahim Raisi and the foreign minister have been confirmed dead Monday after a helicopter crash. The officials’ shocking demise casts additional investor doubt on a region already plagued by economic upheaval, with supply chain uncertainties fueling record-high metal prices this week.


South Korea’s New Way to Pursue Safety

While gold bullion is most often sold in bar or 1oz coin form, the Korean retail market is benefitting from gold’s latest success with a very atypical marketing strategy. It has been traditionally thought that investors prefer larger increments of bullion because they simplify calculations and have a lower transaction cost than buying the same amount of gold in smaller increments. Demand for traditional bars and coins in South […]


What Will CBDCs Mean for Gold?

With the eventual introduction of central bank digital currency (CBDCs) now seemingly inevitable, there are a lot of directions central banks could take with their digital currency projects that would have dramatic implications for the price of gold.


Will the World’s Most Pro-Bitcoin Politician Embrace Gold?

Since Nayib Bukele became president of El Salvador, El Salvador has been in American media and global political discussion more than ever. While much of the attention focuses on Bukele’s mass incarceration of gang members and a decline in homicide of over 70%, Bukele has also drawn attention to his favoritism towards Bitcoin and how he […]


Comments are closed.

Call Now