2024 second quarter platinum market fell into a significant deficit
The platinum market fell into a significant deficit in Q2’24. Investors increased their ETF holdings as soaring gold prices made platinum appear undervalued, especially given its strong long-term fundamentals. Investment demand jumped to its highest level since the peak of the pandemic in Q3’20, while quarterly jewellery demand breached 500 koz for the first time since Q4’21.
Meanwhile, automotive demand and industrial demand remained steady. These factors resulted in total demand of 2,421 koz during Q2.24. Despite a strong quarter for mine production and stabilising secondary supply, at 1,958 koz global supply fell well short of demand, resulting in a 464 koz deficit.
Supply
Refined mine supply experienced a 4% year-on-year increase to 1,540 koz, due to growth from South Africa, which offset declines from other regions. South Africa’s output rose by 7% year-on-year to 1,126 koz, underpinned by higher refining volumes from Anglo
American Platinum (Amplats) and Impala Platinum (Implats).
Amplats’ production benefited from the processing of semi-finished inventory, with refined output surpassing underlying mine production. As part of its cost-saving initiatives, Amplats placed its Mortimer smelter on care and maintenance in April, leaving three smelters in operation. However, the company anticipates that the reconfiguration of its processing operations will have minimal impact on overall production.
Implats’ output was affected by the scheduled rebuild of Furnace No. 5 at the Impala Rustenburg facility, which was recommissioned in April. However, the absence of load curtailment, which had impacted Q2’23, resulted in an increase in output.
Zimbabwe’s output remained stable year-on-year at 125 koz, as a decline at Zimplats was offset by growth at Unki.
In Russia, production fell by 5% year-on-year to 181 koz, primarily due to lower platinum content in Nornickel’s PGM ore sources. The company is currently undertaking maintenance on Furnace # 2 at the Nadezhda Metallurgical Plant, with the impact on platinum production
expected to be reflected in the second half of the year.
North American production declined by 17% year-on-year to 61 koz. This was primarily due to reduced output from Vale’s by-product nickel mining, which in turn stemmed from planned maintenance of processing infrastructure.
Sibanye-Stillwater announced on 11th July that a cyber-attack had impacted its global IT systems, delaying the release of operating results. While some disruption to US PGM operations was reported, the full impact on production volumes remains undetermined.
