Mumbai: World Platinum Investment Council (WPIC) has published a new study of the platinum market that says the demand surged 25% in 2023 to 8 million ounces, while total supply fell to 7.13 million ounces.

Analysts at WPIC believe that platinum demand will remain robust in 2024, however it is expected to drop by 6% to 7.51 million ounces. Meanwhile, the market deficit is projected to decrease from 878 000 ounces in 2023 to 418 000 ounces this year.

Total market supply of platinum fell to 7.13 million ounces last year, which is the second-lowest figure since 2013. It is projected to decrease further by 1% year-on-year to 7.09 million ounces in 2024. Global recycling supply dropped for the third consecutive year in 2023, down 14% year-on-year to 1.5 million ounces.

“Continuing deficits highlight platinum’s demand resilience and supply vulnerability amidst global economic challenges. Platinum’s significant demand growth in 2023 and its expected level in 2024 are to a large extent, predicated on strong automotive demand growth, despite a decline in internal combustion engine vehicle production,” said Trevor Raymond, CEO of WPIC.

“The challenge for platinum investment has been the lack of a price response to the underlying fundamentals. We believe this is a function of range-influenced algorithmic trading and automakers’ management of excess platinum inventories, accumulated when they underproduced more than 30 million vehicles as a result of the pandemic and the semiconductor shortage.”