This year, the supply of platinum on the world market exceeds demand. The World Platinum Investment Council (WPIC – Alliance of Foreign Metal Producers) has revised its forecast for 2021, according to a report by the organization, quoted by Vedomosti.
WPIC raised its estimate for the surplus of this precious metal at the end of 2021 to 769 thousand troy ounces. This is very close to the maximum registered value of surplus reached in 2018 – 800 thousand ounces. In September, the projected surplus was just 190,000 ounces for the current year. At the same time, according to the organization’s forecasts, in 2022 the surplus of platinum on the world market will be 637 thousand ounces.
Until recently, in 2019 and 2020, there was a shortage of this precious metal on the market.
Total platinum production in the world, taking into account processing in 2021, will amount to 8.11 million ounces (19% more than the level of 2020), in 2022 is projected at 8.24 million. ounces (an increase of 1%). At the same time, demand for platinum is expected to grow by 3% to 7.6 million ounces in 2022, including a 34% increase in investor demand.
The overproduction of platinum is due, among other reasons, to layoffs in the production plans of car manufacturers due to problems with microchips, the WPIC review found. The automotive industry is “shaking” due to a shortage of microchips for more than six months. Manufacturers around the world will not be able to produce 7-9 million cars this year, BCG analysts estimated in August.
In the first half of 2021, the losses on the world car market amounted to approximately 4 million new cars not produced. In the second half of the year, according to BCG forecasts, another 3-5 million cars will not be assembled. According to statistics, in 2020 the world produced a total of about 77 million cars.
The WPIC study shows that the demand for platinum from car manufacturers will still increase: in 2021 – by 14%, and in 2022 – by 20%. These figures are significantly lower than the organization’s previous forecasts: in its March survey, it forecast a 25% jump in platinum demand from the automotive industry in 2021.
However, the decline in global demand for platinum in 2021 is mainly due to the collapse of demand from the investment sector (down 86%), incl. demand for platinum bars and coins (a decrease of 36% for the year). At the same time, for 2021 the industrial demand for platinum will increase by 26%, and in the jewelry industry the increase is by 5%. Overall, global platinum demand in 2021 will decline by 5% to 7.35 million ounces, according to the survey.
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January futures (2022) for platinum on the New York Stock Exchange (NYMEX) traded at 1016 dollars per troy ounce on November 24. Since the beginning of the year, the metal has fallen in price by 8%. The maximum price of platinum for this year was registered in February – $ 1266 per ounce.
According to analysts, by the end of 2021, platinum prices will continue to fluctuate at the current level – about $ 1,000 per ounce, “provided there are no surprises from the US Federal Reserve.” The long-term prospects for the platinum market are generally positive, analysts say.
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