Platinum deficit anticipated in 2023 after bumper surpluses, WPIC says By Reuters

LONDON (Reuters) – The World Platinum Funding Council (WPIC) stated on Tuesday it anticipated a deficit of the steel utilized in car exhausts, business and jewelry in 2023 after a hefty surplus this 12 months.

It stated use by auto makers would rise and traders would flip from internet sellers to internet patrons, pushing demand in 2023 up 19% to 7.77 million ounces, probably the most since 2020.

Energy outages and upkeep at mines in prime producer South Africa will in the meantime limit provide, making a deficit of 303,000 ounces subsequent 12 months, stated the WPIC, which makes use of information from consultants Metals Focus.

The WPIC additionally stated the market could be oversupplied this 12 months by 804,000 ounces, lower than the 974,000-ounce surplus it stated it anticipated in its final quarterly report in September.

Platinum market steadiness https://fingfx.thomsonreuters.com/gfx/ce/zgpobmnobvd/WPICpercent20Q3percent20BALANCE.JPG

Auto business demand is being boosted by rising car manufacturing and tighter laws requiring extra steel in exhaust methods to neutralise emissions.

Producers are additionally changing palladium with cheaper platinum to economize, with such substitution accounting for 340,000 ounces of platinum demand this 12 months and simply over 500,000 ounces in 2023, the WPIC stated.

Purchases of platinum bars and cash will rise 49% subsequent 12 months as shopping for in Japan will increase, the WPIC stated, whereas outflow of steel from change traded funds and exchanges ought to gradual significantly.

It stated demand from business could be the second highest on file in 2023 as use by glassmakers will increase by 52%.

International platinum demand https://fingfx.thomsonreuters.com/gfx/ce/gkvlwgloypb/WPICpercent20Q3percent2022.JPG

Regardless of oversupply, availability of platinum has been tight as a result of China has imported 2.5 million ounces since early 2021, the WPIC stated.

These imports aren’t included within the WPIC’s demand information as it’s unclear whether or not and the way they’re getting used.

“These extra imports, whether or not used or held as stock, exceed the 2021 and 2022 world surpluses mixed, and won’t be accessible to re-enter Western markets to deal with the deficit in 2023 resulting from home export controls,’ stated WPIC chief government Trevor Raymond.

“This might result in a good additional tightening of the platinum market subsequent 12 months,” he stated.

Following are numbers and comparisons.

ANNUAL PLATINUM SUPPLY/DEMAND (‘000 oz)*

2021 2022f 2023f 2022/ 2023/

2021 % 2022 %

change change

SUPPLY

Refined Manufacturing 6,297 5,643 5,726 -10% 1%

Producer Stock +/- -93 -5 0 N/A N/A

Recycling 1,937 1,669 1,740 -14% 4%

TOTAL SUPPLY 6,204 5,637 5,726 -9% 2%

DEMAND

Automotive 2,635 2,964 3,288 12% 11%

Jewelry 1,953 1,953 1,954 0% 0%

Industrial 2,450 2,110 2,316 -14% 10%

– Of which chemical 658 627 666 -5% 6%

– Petroleum 172 200 180 17% -10%

– Electrical 135 110 107 -19% -3%

– Glass 697 316 481 -55% 52%

– Medical 267 276 283 3% 3%

– Different 522 581 599 11% 3%

Funding -45 -525 212 N/A N/A

– bars and cash 332 340 507 2% 49%

– ETF holdings -238 -550 -275 N/A N/A

– Trade shares -139 -315 -20 N/A N/A

TOTAL DEMAND 6,993 6,502 7,770 -7% 19%

SURPLUS/DEFICIT 1,147 804 -303 -30% N/A

Above Floor Shares 3,623 4,426 4,123 22% -7%

QUARTERLY PLATINUM SUPPLY/DEMAND (‘000 oz)*

Q3 2021 Q2 2022 Q3 2022 Q3/Q3 %

change

SUPPLY

Refined Manufacturing 1,571 1,530 1,401 -11%

Producer Stock +/- -43 -2 -43 2%

Recycling 452 439 391 -13%

TOTAL SUPPLY 1,529 1,528 1,357 -11%

DEMAND

Automotive 580 712 723 25%

Jewelry 485 496 482 -1%

Industrial 543 565 553 2%

– Of which chemical 161 167 174 8%

– Petroleum 39 50 51 29%

– Electrical 35 27 26 -26%

– Glass 112 101 92 -18%

– Medical 66 70 69 4%

– Different 130 150 141 9%

Funding -282 -137 -272 -4%

– Bars and cash 110 75 97 -12%

– ETF holdings -219 -89 -235 7%

– Trade shares -173 -123 -134 -22%

TOTAL DEMAND 1,325 1,636 1,485 12%

SURPLUS/DEFICIT 656 331 263 -60%

* Supply: World Platinum Funding Council, Platinum Quarterly Q3 2022