# Platinum facing biggest deficit in years as carmakers snap up metal Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-05-15 Category: TRADING Category URL: https://financedigest.com/category/trading Meta Title: Platinum Market Faces Biggest Deficit in Years as Automakers Meta Description: Platinum market set for largest deficit in years due to automakers' demand shift from palladium, rising production of heavy-duty vehicles, and growth in URL: https://financedigest.com/platinum-facing-biggest-deficit-in-years-as-carmakers-snap-up-metalhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-05-15t134634z1lynxmpej4e0izrtroptp4global-precious-1736814013970-compressed.jpg) # Platinum facing biggest deficit in years as carmakers snap up metal LONDON (Reuters) – Rising demand from automakers, industry and investors will push the global platinum market into its biggest deficit in years, three industry reports predicted on Monday. The reports underline an emerging change in fortunes for platinum and its sister metal palladium, both used chiefly in vehicle exhausts to neutralise harmful engine emissions. For years, rising demand and undersupply of palladium pushed prices higher, while lacklustre consumption and more plentiful availability kept platinum prices low. Two of Monday’s reports [predicted that while palladium would remain in deficit this year](https://www.financedigest.com/ten-years-down-the-line-predicting-the-future-of-fs.html "Ten years down the line: predicting the future of FS"), platinum’s undersupply would be bigger. Automakers are now shifting from palladium to platinum to [save money](https://www.financedigest.com/saving-money-hacks.html "Saving money hacks"), production of platinum-intensive heavy-duty vehicles is rising, and exhaust-free electric vehicles are making inroads into the palladium-focused light vehicle market. Also [supporting platinum are consumption by industry](https://www.financedigest.com/uk-consumer-industries-warn-curbing-energy-support-will-hit-demand.html "UK consumer industries warn curbing energy support will hit demand") and jewellers, while palladium demand depends almost entirely on autos. Palladium [prices have fallen sharply in recent months](https://www.financedigest.com/oil-prices-ease-to-trade-near-2-month-lows-on-china-demand-fears-dollar-strength.html "Oil prices ease to trade near 2-month lows on China demand fears, dollar strength"), while platinum prices show signs of recovery. Specialist [materials maker Johnson Matthey said the roughly 8 million ounce a year platinum market](https://www.financedigest.com/automotive-soft-trim-interior-materials-market-size-key-players-growth-factors-regions-and-applications-industry-forecast-by-2026.html "Automotive Soft Trim Interior Materials Market Size, Key Players, Growth Factors, Regions and Applications, Industry Forecast by 2026") would be undersupplied by 128,000 ounces this year, the first deficit since 2020 and a major shift from last year’s surplus of 740,000 ounces. The World Platinum Investment Council predicted a 983,000-ounce platinum deficit – the [biggest since](https://www.financedigest.com/dollar-set-for-biggest-two-day-fall-since-2009-as-rate-outlook-shifts.html "Dollar set for biggest two-day fall since 2009 as rate outlook shifts") at least 2014 – after last year’s surplus of 854,000 ounces. Consultants [Metals Focus forecast](https://www.financedigest.com/metallic-glass-market-is-estimated-to-expand-at-a-cagr-of-6-5-during-the-forecast-period-of-2020-2030.html "Metallic Glass Market is estimated to expand at a CAGR of 6.5% during the forecast period of 2020-2030") a 953,000-ounce platinum undersupply, up from just 53,000 ounces in 2022. The [forecasts use slightly](https://www.financedigest.com/german-govt-to-slightly-raise-2023-gdp-forecast-sources.html "German govt to slightly raise 2023 GDP forecast – sources") different methodology, with Metals Focus excluding platinum bought or sold by exchange-traded funds. JM also predicts a [rise in supply of both platinum and palladium this year](https://www.financedigest.com/oil-rises-to-7-year-high-as-turkey-outage-adds-to-tight-supply-outlook.html "Oil rises to 7-year high as Turkey outage adds to tight supply outlook"), which Metals Focus and the WPIC do not. For the roughly 10 million ounce a [year palladium market](https://www.financedigest.com/puma-confirms-full-year-outlook-flags-market-volatility.html "Puma confirms full-year outlook, flags market volatility"), JM predicted a deficit of 43,000 ounces this year, down from 531,000 ounces in 2022. Metals Focus, however, foresees the [deficit rising to 707,000 ounces from 547,000 ounces last year](https://www.financedigest.com/austria-plans-to-bring-budget-deficit-within-3-of-gdp-next-year.html "Austria plans to bring budget deficit within 3% of GDP next year"). Following are numbers and comparisons from Johnson Matthey’s report. PLATINUM (THOUSANDS OF OUNCES) 2022 2023 % change SUPPLY Primary supply (mined) 5,530 5,808 5% Secondary supply (recycled) 1,468 1,521 4% TOTAL SUPPLY 6,998 7,329 5% DEMAND Automotive 2,762 3,063 11% Chemical 699 697 0% Dental & biomedical 253 257 2% [Electrical & electronics](https://www.financedigest.com/sales-polycarbonate-resins-to-be-concentrated-in-electrical-electronics-industry-through-2029.html "Sales Polycarbonate Resins to be Concentrated in Electrical & Electronics Industry Through 2029") 235 266 13% Glass 594 565 -5% Investment -565 283 Jewellery 1,344 1,351 1% Petroleum 230 213 -7% Pollution control 223 260 17% Other 483 502 4% [TOTAL DEMAND](https://www.financedigest.com/corrugated-boxes-market-will-total-us-128-3-bn-in-2021-spurred-by-surging-demand-in-food-industry.html "Corrugated Boxes Market will Total US$ 128. 3 Bn in 2021 Spurred by Surging Demand in Food Industry") 6,258 7,457 19% Movement in [stocks](https://www.financedigest.com/mutual-funds-vs-stocks-which-is-better.html "stocks") 740 -128 PALLADIUM (THOUSANDS OF OUNCES) 2022 2023 % change SUPPLY Primary supply (mined) 6,307 6,556 4% Secondary supply (recycled) 3,099 3,234 4% TOTAL SUPPLY 9,406 9,790 4% DEMAND Automotive 8,449 8,251 -2% Chemical 589 534 -9% Dental & biomedical 186 171 -8% Electrical & electronics 544 545 0% Investment -109 25 Jewellery 87 88 1% Pollution control 108 123 14% Other 83 96 16% TOTAL DEMAND 9,937 9,833 -1% Movement in stocks -531 -43 RHODIUM (THOUSANDS OF OUNCES) 2022 2023 % change SUPPLY Primary supply (mined) 695 724 4% Secondary supply (recycled) 338 345 2% TOTAL SUPPLY 1033 1069 3% DEMAND Automotive 953 947 -1% Chemical 66 82 24% Electrical & electronics 5 6 20% Glass -41 5 Other 15 15 0% TOTAL DEMAND 998 1055 6% Movement in stocks 35 14 Source: Johnson Matthey (Reporting by Peter Hobson; Editing by Jan Harvey) --- This blog is powered by Superblog. 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