The WPIC excludes Putin’s war in its platinum forecast

World Platinum Investment Council today said platinum surplus of 1,232 koz in 2021 was forecast to reduce by 47% in 2022 as COVID-related and operational disruptions gradually settle.

  • Increase in supply in 2021 forecast to plateau in 2022, as last of semi-finished material overhang is processed
  • Significant rises in automotive (+11% ), industrial (+27%), and jewellery (+5%) demand in 2021 set to remain strong in 2022
  • Fall in investment demand from historic highs of 2020 brought overall demand down in 2021. Bar and coin demand is expected to increase by 29% (+97 koz) this year
  • Imports into China, significantly above identified demand, absorb full 2021 surplus, with ongoing tightened conditions in the platinum bullion market

COVID-related factors and operational disruptions played out particularly during the second half of 2021, having a huge impact on both the supply of and demand for platinum. Despite significant demand growth in most sectors, strong supply levels – boosted by a production surge from the accelerated processing of the backlog of semi-finished material – combined with the reduction in NYMEX stocks and net negative ETF demand saw a platinum surplus of 1,232 koz, with total platinum supply increasing by 21% and total demand decreasing by 9% year-on-year.
As these issues normalise in 2022, this surplus is forecast to reduce in 2022 to 652 koz, as demand increases 7% (+520 koz), while supply declines 1% (-61 koz).
While global economic growth in 2021 surprised to the upside and was expected to stay strong in 2022, with the IMF projecting a growth rate of 4.4%, the consequences of the Russian invasion of Ukraine are difficult to predict at this juncture. However, early indications are that supply disruption of palladium from Russia may well enhance platinum demand.

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