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# Platinum in the Long and Short Term

Sean Brazney and Jeffrey Christian · May 24, 2023

[Watch Video](https://player.vimeo.com/video/828065019)

## Video Transcript

**Sean Brazney:** Hello! My name is Sean Brazney, Sales Director for Monex Deposit Company. I am here today with Jeffrey Christian, Founding Member of CPM Group, one of the many analysts over there at CPM Group, and the author of our, *2023 Precious Metals in the Eye of the Storm*, as also, the author of many other reports that we put out that I’ll talk about today, but thank you for being with us today, Jeffrey.

**Jeffrey Christian:** It’s always a pleasure to be with Monex.

**Sean Brazney:** You know, I wanted to talk about platinum today. I have been somewhat bullish on accumulating platinum under $1,000 an ounce. One into the $800’s in just the recent past here. I personally bought just a little bit myself. We saw a move down to around $910. After that, I bought a little bit more and it’s because of my belief in holding platinum for the potential to maybe sell it one day. There’s a time to buy and there’s a time to sell, as you and I were talking about Jeffrey. You know, I came across a report today and it was from the World Platinum Investment Council that talked about a deficit in platinum. Of course, it kind of spurred me to think about platinum, because I have an interest there and I believe in it, but it also reminds me of why we are so thankful to having resources, and good data, and people like you to rely on for this data, because I reached out to you and asked you to confirm some of that information for me and you have some information of your own that I think is very beneficial to our viewers and the people that are accumulating platinum. I’m wondering if you’d share that with us today.

**Jeffrey Christian:** I’m always reluctant to talk about other people’s reports and data, but I think in this case we have to. Let me start by saying, in CPM Group’s view, we use commodities 101, basic economics. So, when we talk about a surplus and a deficit in any commodity, we look at total newly refined metal from mines and from scrap—less fabrication demand, and if fabrication demand is more than supply on an annual refined basis, then you’ve got a deficit, and if it’s less than that, then it’s a surplus. In our data, we have surpluses in platinum for 40 of the last 47 years, and since 2015, we’ve had persistent surpluses, sometimes quite large. The World Platinum Investment Council is an organization that was created around 2014-2015 to promote platinum to investors. They add a dummy variable for platinum investment demand to fabrication demand, and then they say… oh look, when you add investment demand and fabrication demand together you have deficits and therefore the prices got to rise. It’s really a promotional thing. It’s a trend that you saw emerge in the 90’s in silver, and then gold, and then the platinum promoters picked it up too. We promote profitability and I like platinum, like you… I own platinum. I own platinum, both as a longer-term investment and just in case it goes up, but I also own platinum as a shorter-term investment. We’ve seen it trade between $800 and $1,000 for much of the last eight years or so. It’s starting to break out of that over the last three years. We saw one run up to $1,300, well $1,293 I think, when Russia invaded Ukraine, and then it came back down. Then it went back up to $1,200 and now it’s back down around $1,067, as we speak. So, our view is that the price will move up slowly and the potential for these kinds of spikes does exist and will continue to exist. We look at the fundamentals we see on the supply side, South African producers have not invested sufficiently to keep their production where it is, much less increase it. So that’s going to be falling and that’s going to apply upward pressure on prices. The other major source of platinum is Russia and Russian supply is up for re-definition, because of the changed circumstances in the Russian government and the whole world. So, you got a couple positives on the supply side. On the demand side, the major use of platinum is auto catalysts. The auto industry continues to be relatively weak and within the auto industry—that’s a negative for platinum. Within the auto industry, you’re seeing increased market share for electric vehicles, which don’t use platinum, palladium, or rhodium. So, there are a couple negatives on the demand side. Then there’s a really big positive for platinum, which is that you’re seeing an increased use of platinum, substituting platinum for palladium and to some extent to rhodium in auto catalysts, because of the price differential, and that’s emerged over the last couple of years and that has increased platinum demand in the auto industry by a couple hundred thousand ounces. That’s a big positive. You look at those 5 factors that I just listed as negative and positive, that’s probably the most important one. So, there are some positives in the platinum industry. You’ve seen the South African institutional investors, that we supply our research and analysis to, they’re buying platinum ETFs. They’re buying platinum ETFs, because they have foreign exchange restrictions. They have to invest a certain amount within the South African economy and they don’t want to invest in the platinum mining companies’ stocks, because they don’t see them particularly attractive. They see them as contracting and not expanding and that makes them more bullish on the metal. Some there is some bullishness there, but I think that you have to pay attention to these headwinds as well.

**Sean Brazney:** You mentioned some this in your report you did for us, *2023 Market Outlook for Platinum and Palladium*. I want to remind our viewers that that’s available to you for free when you call in and talk to an account representative. They can get that out to you right away, as well as, our *2023 Precious Metals in the Eye of the Storm*. As always, we really appreciate your time and your data today, Jeffery. Thank you!