Automotive platinum demand to reach eight-year high in 2025
Amid economic challenges and high interest rates, vehicle production forecasts for this year have been revised downward, particularly in Europe. Consequently, global automotive platinum demand declined by 3% year-on-year (-21 koz) in Q3 2024 and is expected to decrease by 2% year-on-year (-49 koz) in 2024, reaching 3,173 koz, which includes 751 koz of platinum for palladium substitution.
As automakers adjust strategies to boost lower-CO2, internal combustion engine-based, hybrid vehicle sales, to mitigate regulatory challenges, automotive platinum demand is projected to strengthen by 2% year-on-year to reach 3,245 koz in 2025 – the highest level since 2017.
Steady growth in the jewellery sector
Global jewellery demand increased by 7% year-on-year to 478 koz in Q3 2024 (+32 koz), driven largely by a 68% surge in Indian jewellery fabrication to 66 koz, the second-highest quarterly figure in our time series since 2013. This rise, along with gains in key markets such as Japan and North America, will help overall jewellery demand for 2024 increase by 5% (+102 koz) year-on-year to 1,951 koz.
This positive trend is expected to continue into 2025, with a projected 2% (+32 koz) increase in demand to 1,983 koz. Growth is anticipated to continue in India, and also expected in North America, driven by post-election sentiment, and, in China, supported by product innovations.
Industrial demand to contract by 9% in 2025 as capacity expansion projects taper
The industrial sector saw robust demand in Q3 2024, increasing by 15% year-on-year (+76 koz). For full year 2024, industrial demand will ease back by just 1% compared to the previous year to 2,434 koz. Gains in the electrical (+1% to 90 koz), medical (+4% to 303 koz), hydrogen (+123% to 64 koz), and glass (+29% to 671 koz) sectors will be offset by a 28% decline in the chemical sector, as cyclical capacity expansions in China conclude.
After three years of exceptional growth, industrial demand is projected to contract by 218 koz to 2,216 koz in 2025, representing a 9% decrease. This downturn is primarily due to a 57% (-385 koz) drop in platinum demand from the glass sector to 286 koz, due to fewer capacity expansions. However, 2025 is expected to see strong growth in the chemical (+17% to 656 koz), petroleum (+31% to 211 koz), medical (+4% to 314 koz), and hydrogen (+32% to 84 koz) sectors.
Third consecutive year of net positive investment demand expected in 2025
Outflows in ETFs and exchange stock movements in Q3 2024 led to net disinvestment of 226 koz for the quarter, the first-time net disinvestment has occurred this year. In 2024, a 17% increase in demand for larger bars in China (500g and over) to 157 koz and net positive ETF holdings of 150 koz for the full year are expected. However, this will be offset by a 47% (151 koz) drop in global bar and coin demand, excluding China larger bars, driven by price-driven selling in Japan and weaker demand in North America. The result will be net positive investment demand of 393 koz for the full year.
For 2025, total investment demand is expected to rise 7% to 420 koz, driven mainly by growth in stocks held by exchanges and an 8% increase in demand for bars of 500g and larger in China. While global bar and coin investment demand is forecast to ease by 12% to 151 koz, bar and coin demand in North America is projected to return to growth. Platinum ETF holdings are also expected to rise by 50 koz, as some US investors look to gain exposure to higher-for-longer internal combustion engine vehicle production.
