Platinum market faces massive deficit: carmakers secure coveted metal
Production forecast: 8 million ounces this year with deficit of 128,000 ounces

According to recent reports, the global platinum market is set to enter its largest deficit in years due to rising demand from automakers, the industry and investors. This marks a significant change in the trajectory of platinum and its sister metal palladium, which are mainly used to neutralize harmful engine exhaust gases in vehicle exhausts.
For an extended period, growing demand and tight supplies of palladium drove up prices, while platinum traded at low prices due to a lack of consumer interest and greater availability.
However, two reports are now emerging that forecast platinum will see a larger deficit this year, while palladium will remain in deficit.
The automotive industry is now increasingly switching from palladium to platinum to reduce costs. Production of heavy vehicles with high platinum demand is increasing, while palladium-focused light vehicles are increasingly being replaced by zero-emission electric vehicles.
Industrial consumption and demand from jewelers are also helping to support platinum, while palladium is almost exclusively in demand from the automotive industry.
Palladium prices have fallen sharply in recent months, while platinum is showing signs of recovery.
Specialty materials producer Johnson Matthey forecasts a deficit of 128,000 ounces for the platinum market this year, with annual production of about 8 million ounces. This would be the first deficit since 2020 and a big step away from last year's surplus of 740,000 ounces.
The World Platinum Investment Council even expects a deficit of 983,000 ounces for platinum - the largest since at least 2014, after a surplus of 854,000 ounces last year.
Consultancy Metals Focus forecasts a 953,000-ounce deficit for platinum, compared to just 53,000 ounces in 2022.
These forecasts are based on slightly different methodologies, with Metals Focus excluding the purchase or sale of platinum by exchange-traded funds.
Johnson Matthey also predicts an increase in platinum and palladium production this year, while Metals Focus and the World Platinum Investment Council do not.
For the palladium market, with annual production of about 10 million ounces, Johnson Matthey forecasts a deficit of 43,000 ounces this year, compared with 531,000 ounces in 2022.
Metals Focus, on the other hand, expects the deficit to increase to 707,000 ounces, compared with 547,000 ounces last year.
