Analysts believe platinum will enjoy strong and steady growth in industrial demand. A significant rise in price is the main reason for that.
The metal plays a vital role in the process of electrification and decarbonization. The referred technologies require more and more platinum. It will definitely trigger industrial demand growth in the near future taking into account significantly rising prices. What’s more, some experts predict new price spikes as supplies constrain.
Over the last 10 years, the overall demand for precious metal rose to 3.4% featuring higher yield and lower energy use. Analysts expect the global chemical platinum demand growth to be 1% by the end of 2027.
Another reason for growing demand is the fact that it is not correlated with the price. In simpler words, the overall price dropped a bit since 2013. Nevertheless, the industrial demand is very unlikely to decrease in the next few years. The same situation works for other metals. Despite the fact, we now see palladium and rhodium prices on the rise, the demand is declining.
Generally speaking, what we see is the market switching to platinum while refusing from rhodium and palladium. As the metal is more prevalent with price. In the end, it can lead to 2 potential outcomes. The first possible scenario supposes rising interest rates. The second one involves reverse substitution. The main trick here is that both scenarios are very likely to happen at a time.
According to the analysts’ outlook, the chemical demand for platinum will be around 693 koz by 2027. On the one hand, it is even less than the everage demand stated over the last several years. On the other hand, it can definitely trigger some interesting market moves.
We should also keep in mind the lack of liquidity among some silver and gold mining companies. On the one hand, it can be good for businesses. On the other hand, more and more companies will need to get into production, which will inevitably trigger price correlation.
May the trading luck be with you!