Platinum Price Outlook

“Platinum prices softened over the course of January and during the early days of February, reversing all of the gains made during the last couple weeks of 2022. Platinum prices had started 2023 on a strong note, with prices reaching levels last seen in March 2022 when platinum prices had risen in response to Russia’s invasion of Ukraine. Platinum prices are expected to move sideways around $1,000 in the near term.

There are several factors that should help support platinum prices at an elevated level in the near term. Among them the most important is likely the concern surrounding electricity supply disruptions in South Africa. Given the concentration of platinum mine supply from South Africa any potential disruption to refined mine output from the country has the potential to push platinum prices sharply higher.

There also is the ongoing substitution of palladium with platinum in gasoline autocatalysts that should provide additional support to prices from the demand side. If the China reopening story plays out per expectations, then there could be an increase in demand for commercial vehicles in China, which should help offset some of the weakness that is expected in other major commercial vehicle markets due to slowing economic growth in those countries and regions.

That said, the growing share of light duty vehicles that are EVs, not using PGMs in autocatalysts, is eating into the total demand for all three major PGMs in the auto industry. EVs took around 10% of the global light duty vehicle market in 2022, and are projected to increase their share to around 11% this year.

Seasonal strength should also help prices over the next couple of months.

Beyond the next couple of months, in the absence of any supply disruptions, prices could slide lower toward $880.”