Platinum on Track for Record Deficit, Price Catalysts Building

With demand robust and provide flat, platinum is on monitor for a record 2023 deficit of 1,071,000 ounces.

Edward Sterck, director of analysis on the World Platinum Funding Council (WPIC), broke down these dynamics and what they might imply for the steel’s worth, which stays caught within the US$900 to US$1,100 per ounce vary.

“I feel the important thing level for this yr is it is very a lot a demand-led deficit,” he advised the Investing Information Community.

Complete demand is anticipated to rise 26 % year-on-year in 2023, led by 14 % will increase for automotive and industrial demand. In the meantime, general provide is about to drop 3 % from 2022.

Sterck famous that many tendencies seen this yr are more likely to proceed subsequent yr, making a second consecutive platinum deficit. At 353,000 ounces, the 2024 shortfall shall be smaller than the one seen in 2023, however nonetheless sizeable — the WPIC anticipates that demand will fall 6 % year-on-year, whereas provide will see a 3 % enhance.

Whether or not that can assist platinum escape of its worth rut stays to be seen, however it’s value keeping track of.

“Two years of consecutive deficits is one thing that we expect needs to be fairly fascinating from an funding perspective,” Sterck mentioned. “You’ll be able to’t actually have a deficit within the commodity markets. You both get a worth enhance till you start to get demand being priced out of the market, otherwise you start to get a provide response.”

Watch the interview above for extra from Sterck on the platinum sector.

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Securities Disclosure: I, Charlotte McLeod, maintain no direct funding curiosity in any firm talked about on this article.

Editorial Disclosure: The Investing Information Community doesn’t assure the accuracy or thoroughness of the data reported within the interviews it conducts. The opinions expressed in these interviews don’t mirror the opinions of the Investing Information Community and don’t represent funding recommendation. All readers are inspired to carry out their very own due diligence.