PLTM - Platinum market seen swinging to big deficit on tight supply rising demand

2023-05-15 20:27:11 ET

The platinum market is expected to move to a nearly 1M oz deficit this year, swinging from an 854K oz surplus seen in 2022, according to the new quarterly report from the World Platinum Investment Council released Monday.

Platinum consumption will outstrip supply by 983K oz in 2023, WPIC said, which would be the biggest shortfall in records going back to the 1970s, and nearly doubles the 556K oz deficit the group forecast in March.

Demand for the metal jumped in Q1 2023 to 2M oz from 1.69M oz in Q4 2022, with WPIC citing an upswing from the investment sector and continued improved buying in the auto and industrial sectors.

WPIC sees exchange traded funds as net buyers of platinum this year for the first time since 2020, while industrial demand is forecast to rise 17% Y/Y to an all-time high, driven in part by large glass and chemical making capacity expansions in China.

On the supply side, the group cited a decline in recycled supply as scrap yards withheld recovered metal from the market, and production from top producer South Africa is expected to fall due to the country's electricity crisis.

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CFTC data shows "the largest speculative palladium short on record," Hebba Investments writes in an analysis published on Seeking Alpha .

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