Platinum can get a real boost. According to the World Platinum Investment Council report, the growing automotive demand in 2023 has resulted in a widening deficit.
The automotive demand for the “blonde” metal has shown the highest level since 2017. As a result, the market is currently experiencing a platinum deficit for 2023 of more than 1 million ounces. As stated by the WPIC, a growing automotive demand appeared to be the strongest trigger for the widening deficit along with increasing industrial demand that also showed record levels featuring flat metal supplies.
Judging by the report, experts expect the automotive demand to reach 3,283 koz by the end of this year, which is the highest level over the last 7 years. Platinum substitution n for palladium appeared to be one of the key factors that caused the growth of demand. Some analytics say it can eventually reach 615 koz in 2023 featuring even higher loadings. In simpler words, we can see a higher-than-expected platinum price growth not only in vehicle production but also across other industries and markets.
The automotive sector is experiencing a lack of semiconductor supplies along with critical challenges in supply chains, which caused the demand growth worldwide. For instance, only in China, it surged by 60%. The rally can also be seen in Japan, as the production of diesel/petrol vehicles increased by 20%. The market is seeing the situation when demand for autos exceeds supplies despite growing living costs and worsening macroeconomic conditions.
While platinum is one of the rarest metals in the world featuring unique properties (both physical and catalytic), the asset is highly valued across different industries and economic sectors. This involves not only automotive and industrial demand but also jewellery demand. So, we can certainly see its [rice growing in the near future.
May the trading luck be with you!
