Supply and demand developments in the platinum market

The geopolitical upheavals and supply chain disruptions in the first quarter of 2022 materially reduced both platinum supply and demand and strongly influenced the revised 2022 forecasts. Year-on-year quarterly supply and demand were down more than expected, at 13% and 26% respectively, but full year 2022 supply is forecast down 5% with demand 2% higher than 2021.

• The forecast 2022 platinum surplus has decreased modestly since our last forecast, with a reduced demand outlook more than offset by downgrades to the supply outlook from mines and recycling.
• Significant downward revisions to 2022 mine supply expectations, driven by operational constraints, COVID- and safety-related disruptions, and labour and power shortages.
• A mixed outlook for 2022 demand: Automotive and jewellery demand holding up relatively well despite supply chain challenges and China’s zero-COVID policy. Industrial demand lower than record levels in 2021, but expected to remain the third strongest year on record. Investment demand for bar and coin remains elevated but is offset by weaker demand for ETFs and outflows from stocks held by exchanges.
• Security-of-supply concerns likely to override near-term market balances in the wake of Russia’s invasion of Ukraine and given Russia’s importance to the global supplies of mined palladium and, to a lesser extent, mined platinum. Concerns could increase platinum for palladium substitution efforts and potentially modify procurement and inventory management strategies. Further, the EU actions to displace Russian natural gas with green hydrogen significantly boost the case for fuel cell electric vehicles and platinum demand growth over the medium term.

China imports in excess of identified 2021 demand, primarily due to speculative and quasi-speculative purchases, completely absorbed last year’s estimated market surplus of 1.2 Moz. While too early to expect the same for 2022, due to typical seasonally low purchases in Q1’22, global security of supply concerns are supportive of further speculative purchases.