Recently, World Platinum Investment Council (WPIC) published Platinum Quarterly for Q4 2023. According to the Platinum Quarterly Summary 2023, the final quarter of 2023 saw the consolidation of several demand themes across the platinum market. Demand growth from the automotive and industrial sectors led to a fourth consecutive quarterly platinum market deficit, consistent with previously discussed trends.
Notably, this is only the second time within WPIC’s quarterly time series dating back to Q3 2014 where four consecutive quarterly market deficits have been recorded. Mine supply finished the year on a seasonally strong note, but recycling posted the weakest quarterly output in our time series, reflecting the challenges facing the industry. A negative for the quarter was the weak investment environment with particularly significant ETF outflows.
Bringing fourth quarter data into the full year results, the platinum market deficit decreased by 193 koz to 878 koz versus the Q3 2023 Platinum Quarterly published in November 2023, with the difference mostly due to ETF outflows in Q4. The 2023 deficit reflects a 2% decline in total supply and a 25% increase in demand versus 2022.
Mine supply increased by 1% year-on-year in 2023 to 5,636 koz. All major producing regions increased mined supply, led by South Africa and Zimbabwe, up 1% and 6% year-on-year respectively. Against this backdrop, mine supply remained depressed versus historical levels, as miners faced processing constraints (planned and unplanned) and other headwinds such as ongoing electricity supply shortages in South Africa, strikes, planned closures and safety stoppages.
Recycling supply remained challenged, falling to its lowest annual level in our time series, with autocatalyst recycling declining by 17% year-on-year in 2023 on low end-of-life vehicle availability. Total supply last year of 7,131 koz, was 2% lower versus 2022.
Total platinum demand for 2023 which has been revised down since our last Platinum Quarterly by 141 koz to 8,009 koz, was still up 25% year-on-year. The downward revision is primarily attributable to lower investment demand, which was 265 koz in 2023 (385 koz previously).
However, this still represents a substantial improvement versus 2022 on reduced ETF disinvestment (-20 koz versus -558 koz in 2022), higher bar and coin demand (+49 koz year-on-year) and a minor build in stocks held by exchanges.
Automotive demand totalled 3,272 koz in 2023, up 16% on 2022. This growth reflects ongoing themes of higher-than-expected vehicle sales alongside substitution of platinum for palladium in gasoline vehicles and higher overall loadings, particularly in the heavy-duty and off-road vehicle categories. Automotive demand was revised 10 koz higher than the previous estimate due to battery electric vehicle market share being lower than expected (albeit still growing).
Jewellery demand declined 3% year-on-year to 1,850 koz in 2023 as growth in Japan, Western Europe and India was offset by weaker North American and Chinese demand. China was no longer the largest platinum jewellery market, falling to second place behind North America.
Total industrial demand reached 2,622 koz, up 12% year-on-year, meeting expectations that 2023 would be the strongest year for industrial demand on record. Glass capacity additions (+39% year-on-year) and, to a lesser extent, chemical capacity additions were the big drivers of the year-on-year growth of total industrial demand, offsetting the weaker petroleum and electrical sectors during 2023.
Combining lower supply and strong demand growth results in the platinum market deficit for 2023 reaching 878 koz, or 11% of total demand, the deepest deficit in our time-series going back to 2013.
