CPM Group Precious Metals Advisory

Platinum Price Outlook
After falling during the first half of July, platinum prices made a strong recovery during the second half. Platinum prices slipped to $806.70 on 14 July, their lowest level since June 2020. The decline during the first half of July was in line with the other metals in the precious metals
complex. Platinum prices recovered from the losses during the first half of the month, essentially ending July at price levels where it started the month.

While there are a few bright spots for platinum prices such as the suspension of Sibanye’s Stillwater mine and the reintroduction of platinum in gasoline autocatalysts, there are broader issues such as a slowdown in economic growth, weak auto production and sales, and concerns
about a recession that are weighing on commercial vehicle demand, which is one of the largest sources of platinum demand, as well as light duty vehicle markets. There also is an ongoing loss in diesel passenger vehicle market share in India and Europe, which is further reducing platinum demand and applying downward pressures on prices.

While platinum has some price supportive medium- and long-term fundamentals, in the shorter term the prospects for platinum do not look particularly compelling. This is expected to result in investors adding to their platinum holdings when prices decline, but they are likely to pull back from making fresh purchases when prices rise. In such an environment, platinum prices are expected to move $100 on either side of $900, over the next few

Fabrication Demand
Commercial vehicle demand in most major markets remained weak during June. Of the major markets, the United States showed the least weakness, with other markets experiencing double digit declines during the first half of the year. Commercial vehicle demand in the Unit-
ed States, meanwhile, declined by 6.2% relative to the same period in 2021.

Europe’s diesel passenger vehicle market share continued to decline during the first half of 2022, accounting for 17% of the passenger vehicle market compared to 18% at the end of 2021. European market share for gasoline and battery electric vehicles (BEV) rose during the first half
of 2022 compared to the end of 2021. During this period market share for gasoline passenger vehicles rose to 42% from 40% and BEV market share rose from 10% to 13%. The ongoing decline in diesel passenger vehicle market share coupled with an increase in BEV market share is bad for platinum group metal demand from Europe’s passenger vehicle market. That said, the reintroduction of platinum in gasoline engine vehicles coupled with some growth in gasoline engine market share in Europe is supportive of platinum fabrication demand from the auto sector.

Investment Demand
The U.S. Mint sold another 15,500 ounces of Platinum Eagle coins to dealers during July, taking cumulative sales through the first seven months of the year to 79,000 ounces. This was higher than the 75,000 ounces in full year sales during 2021.