Platinum prices have been a rollercoaster ride in 2024, with volatility despite high demand and supply deficits. The metal saw eroding stockpiles in 2023, driven by record industrial demand. This trend continued into the first half of 2024, with consumption outpacing mine supply by 851,000 ounces.
In the first quarter, platinum prices declined from a high of US$987.50 per ounce to a low of US$871.67 in February before rebounding in March. The second quarter saw prices climb to a year-to-date high of US$1,094.50 in May before pulling back slightly to end the quarter at US$994.40. However, the start of Q3 has seen prices fall further, hovering around US$950 as of July 29.
Factors driving demand for platinum in the first half of 2024 include strong automotive demand, particularly as platinum is increasingly substituted for palladium in autocatalysts. Despite this, the rise of electric vehicles poses a challenge to platinum’s future demand. Inventories at the end of 2023 stood at 4.1 million ounces, with forecasts projecting a decrease to 3.62 million ounces by the end of 2024.
Supply risks remain a concern, with total mine supply expected to decrease annually. The first quarter saw an increase in mine production, particularly from South Africa, the top producer. Recycled supply remained stable during the period.
Overall, sentiment in the platinum market remains positive, with potential for the metal to see upward price momentum as automotive demand stays strong. While challenges like inventory overhang persist, the physical market may start to tighten, providing support for prices in the future.
