London: After two years of significant surpluses, the platinum market is forecast to move to a material deficit in 2023, according to a report from the World Platinum Investment Council (WPIC).
The change from the 776 koz surplus in 2022 to the forecast deficit of 556 koz in 2023 is over 1.3 Moz. This reflects total supply remaining close to the weak level in 2022, up only 3% to 7,428 koz and strong demand growth of 24% to 7,985 koz. Total supply was down in both Q4’22 registering -18% y-o-y to 1,739 koz, and full year 2022 recording -12% to 7,227 koz, as prevailing headwinds in both mining and recycling supply severely curtailed output. For 2022, the total mining supply declined 11% y-o-y at -659 koz, and is forecast to remain broadly flat in 2023 with +28 koz. Global recycling in 2022 fell 17% y-o-y with -349 koz on reduced availability of end-of-life vehicles and lower jewellery recycling. Global recycling is expected to recover by 10% in 2023 to 1,856 koz, driven by an increase in the availability of spent autocatalysts, with autocatalyst recycling forecast to recover by 12% to 1,391 koz.
Industry Reports indicate that automotive demand for the full year 2022 increased by 12% y-o-y reaching 2,957 koz. With these trends set to continue, global automotive demand is expected to increase by 10% in 2023 to 3,246 koz,
Also, Industrial demand for platinum is expected to be an area of stand-out strength in 2023, up 12% y-o-y to 2,505 koz, and just 26 koz below the level in 2021, the strongest year on record.
In addition, jewellery demand is set to increase as restrictions in China ease. In 2023, the demand forecast is seen to go up 15% to +73 koz in China. Growth is also expected in Japan and in India. Meanwhile, declines are anticipated in Europe and North America on account of fewer weddings and recessionary fears. In all, global jewellery demand is expected to improve by 2% growing to 1,936 koz in 2023.
Besides, Investment demand is expected to improve significantly in 2023. Platinum bar and coin demand are forecast to jump by 100% to 450 koz in 2023, a three-year high.
So, it is wise to conclude that the platinum deficit is likely to continue for a number of years to come, besides the deficit forecast for the year 2023.