Platinum faced a deficit in 2024, with demand surpassing supply by nearly 1 million ounces, particularly in the final quarter when the deficit expanded by 313,000 ounces. The surge in demand was attributed to investment interest following political events, such as Donald Trump’s election win and trade policy discussions. The World Platinum Investment Council (WPIC) highlighted the impact of these factors on the precious metal market in its Q4 2024 report.
WPIC’s Director of Research, Edward Sterck, shed light on the driving forces behind platinum’s performance in Q4 2024 and shared insights on the council’s projections for 2025. The deficit deepened due to reduced recycling supply and heightened investment demand, with 360,000 ounces of demand stemming from various investment channels, including platinum bar purchases, ETF inflows, and exchange stocks movement.
Investors reacted to the US administration’s talk of tariffs by shifting physical platinum products to approved warehouses in the US. This move was aimed at hedging against potential tariffs, reflecting the market’s response to political uncertainties. The WPIC anticipates a third consecutive year of deficits in 2025, projecting an 848,000 ounce shortfall, with significant implications for platinum supply and demand dynamics.
Potential US tariffs on Mexico and Canada could impact the auto industry, a key consumer of platinum in catalytic converters. The integration of North American auto manufacturing and the reliance on imported parts underscore the interconnectedness of the industry. Any increase in vehicle costs due to tariffs could dampen demand for platinum and other platinum group metals (PGMs).
On the supply side, mining operations have been restructuring to prioritize profitability, leading to a decline in output despite robust platinum stockpiles entering the market in 2024. South Africa, a major platinum producer, experienced challenges in production due to power shortages, affecting refining activities and contributing to the overall supply squeeze.
Recycling supply of platinum has been below average due to factors like COVID-related disruptions and semiconductor shortages affecting new vehicle production. The WPIC expects recycling supply to remain constrained in 2025, further exacerbating the supply-demand imbalance in the platinum market.
Looking ahead to 2025, the WPIC foresees continued deficits in the platinum market, with investment demand remaining a key driver. Despite a projected pullback in investment demand compared to 2024, total demand for platinum is expected to remain elevated. Futures trading on the NYMEX has seen a substantial uptick, indicating market activity, though price movements have been limited within a narrow range.
Investors are advised to monitor platinum price trends closely, as a breakout from the current range could signal a shift in market dynamics. While uncertainties persist, the WPIC remains cautiously optimistic about the potential for a positive price movement in the platinum market, emphasizing the need for vigilance and adaptability in response to changing market conditions.
📰 Related Articles
- Platinum Supply Deficit Looms Amid Rising Demand Dynamics
- Platinum Market Forecasts 2025 Deficit Amid Economic Uncertainty
- Silver’s Future Trajectory Amid Price Surge and Market Dynamics
- Ram TRX Final Edition Sale Signals Shift in Market Dynamics
- Queensland Real Estate Market Surges Amid Changing Dynamics