Recently, World Platinum Investment Council (WPIC) released Platinum Quarterly for 1Q 2024. Global bar and coin investment demand halved (-50%) to 64 koz (-64 koz) in Q1’24, representing the largest year-on-year decline since Q4’22. Overall, the decline in the global total was driven by far weaker Japanese and, to a lesser extent, North American purchases, which offset gains in Europe and China.
Before looking at the detail, it is important to note that Metals Focus has revised the retail investment series up. We have seen new information and done field research recently, all of which have made clear that our previous estimates for Chinese bar and coin demand in recent years were too low. Attractive platinum prices, growing product availability and aggressive promotional activities all have culminated in a dramatic growth of Chinese demand, which reached 52 koz in 2023 and will likely grow further this year.
Having undertaken this research, we are also now showing China separately in the PQ. Although usually falling outside of the scope of our retail investment series, we have also seen strong growth in demand for locally manufactured 500g and 1kg platinum bars from high net-worth and other market players. In 2023 these purchases seem to have been well above 100 koz.
All these volumes would have in the past been misidentified as speculative inventory build of imported bars sold on the SGE. As our research into these segments is ongoing and new information is collected, we may need to revise these estimates in the near future. In Europe, retail investment jumped by 50% (+3 koz) year-on-year to 8 koz, as lower prices in early 2024 stimulated fresh interest.
That said, this growth came from a low base in 2023 when annual volumes had fallen to a six-year low. Even following this rebound, overall volumes in Q1’24 remained subdued, a reflection of weak appetite for physical bars and coins across gold, silver and platinum retail investment demand in Japan was disappointing in Q1’24. Turnover was low across both gross purchases and sales.
While the market overall was in net investment, at 2 koz this was tiny. The problem platinum continues to face in the country is gold’s much publicised relentless rally, which continues to attract investors to that metal, ultimately at the expense of platinum. Of course, platinum’s own lack of price volatility has also not helped. In China, bar and coin investment enjoyed year-on-year growth in Q1’24 as investors saw the platinum price as undervalued (while gold hit record highs). Importantly, some platinum jewellery showrooms started selling platinum bars.
Platinum exchange-traded fund (ETF) holdings increased 11 koz in Q1’24 to 3,077 koz, 49 koz lower than at the end of Q1’23. The gains were led by Western-held funds, with those listed in European and North America growing by 11 koz and 18 koz respectively, which were offset by declines in South Africa at 17 koz.
Platinum’s low price throughout the quarter presented a window for opportunistic buying, albeit modestly. This was particularly true in North America which saw a significant -0.7 correlation between volumes and prices (buying at lower prices) throughout the quarter. Combined Nymex and TOCOM stocks fell 11 koz in Q1’24.
