Despite the continuous struggle of platinum prices, the market still receives good support, and the World Platinum Investment Council (WPIC) predicts a shortage in the platinum market in 2024 and 2025.

Platinum faces shortage in 2025, leading to a rebound in demand in the automotive industry

WPIC Research Director Edward Sterck stated that the platinum market continues to face stable demand, while supply cannot keep up with the growth of demand, and this supply-demand imbalance trend is expected to continue in the future.

He said, "When you see a sustained disconnect between supply and demand, the prospects for platinum are quite attractive

The third quarter platinum market report released by WPIC predicts that platinum will face a shortage of 682000 ounces in 2024, lower than the second quarter forecast of 1 million ounces. In its preliminary outlook for 2025, WPIC expects a shortage of 539000 ounces of platinum in the market.

Sterck pointed out that although the situation of insufficient supply has slightly improved in the past three months, production in South Africa has increased, and inventory in COMEX warehouses has also decreased, he emphasized that this does not change the long-term fundamental outlook of the platinum market.

The automotive industry remains the largest source of platinum demand. Platinum is an important component of automotive catalytic converters used to reduce harmful emissions in internal combustion engines.

The WPIC report states that due to persistently high interest rates, platinum demand in the automotive industry is expected to perform poorly in 2024, resulting in a slowdown in sales of internal combustion engine vehicles. The steady demand for electric vehicles (which do not require platinum) continues to put pressure on the platinum market. This year, the demand for platinum in the automotive industry is expected to decrease by 3% to 3.173 million ounces, lower than the third quarter of 2023.

However, looking ahead to 2025, WPIC expects the demand for platinum in the automotive industry to rebound by 2%, reaching 3.245 million ounces, the highest level in eight years.

Except for the automotive industry, industrial demand for platinum is expected to remain relatively stable (although it grew by 15% in the third quarter).

The report states that this growth is mainly driven by a 10% increase in demand from the electrical and medical industries, as well as a 96% surge in demand from the glass industry (although from a lower base). Looking at the whole year, industrial demand is expected to slightly decrease to 2.434 million ounces, a year-on-year decrease of 1%. However, it is expected that this trend will not continue in 2025, and demand will decrease by 9%.

Platinum demand in the jewelry industry is growing, but investment demand is showing mixed performance

One highlight of the platinum market is the growing demand for jewelry. The report indicates that after steady growth in the third quarter, jewelry demand is expected to increase by 5% to 1.951 million ounces.

India is a key market for platinum jewelry, with consumption reaching 66000 ounces in the third quarter, the second highest quarterly figure in the WPIC data series since 2013.

WPIC expects jewelry demand to remain strong by 2025, with a growth rate of 2%.

The report states, "It is expected that demand in India will continue to grow, and the North American market is also expected to grow due to post election market sentiment

The investment demand for platinum still varies. Platinum ETFs have experienced capital outflows, and the price increase in the third quarter has also put pressure on the demand for small platinum bars and coins.

However, WPIC emphasizes that platinum investment demand is expected to decrease by 1% to 393000 ounces for the full year of 2024.

Looking ahead, WPIC expects a rebound in platinum investment demand by 2025, with an expected growth of 7%.

The report concludes that although global investment demand for platinum bars and coins is expected to decrease by 12% to 151000 ounces, demand for platinum bars and coins in North America is expected to resume growth. Because some American investors hope to gain platinum exposure by participating in the long-term growth of internal combustion engine vehicle production, the holdings of platinum ETFs are also expected to increase by 50000 ounces.