The World Platinum Investment Council (WPIC) warns of a significant platinum shortage by 2024, driven by falling mining returns in South Africa and Russia. This shortage could cause platinum prices to reach unprecedented highs.
Restricted output is attributed to strict environmental regulations, labor disputes, and dwindling resources. This news worries investors globally, as platinum-initiated industries like automobile, jewelry, and tech sectors may suffer.
WPIC Research Division’s head, Edward Sterck, highlights the urgent need for quick, strategic action. He suggests that the lack of supply might make it difficult to cover the rising demand by 2024. This problem constitutes 6% of the operative demand and might significantly disrupt the market balance.
The anticipated lack of platinum might be attributed to factors such as production slowdowns, low palladium and rhodium prices in South Africa, recycling reduction, rising labor costs, and political instability in specific platinum mining nations. Vehicle technology alterations might also reduce platinum demand, making the shortage worse. Minimizing ore grades and mining cost hikes threaten the stability of the platinum supply even further.
Russia’s situation is similarly worrying — planned smelter maintenance and continuous Western sanctions may potentially result in a 9% output fall.
Forecasted 2024 platinum shortage and implications
This is troublesome as Russia is one of the most significant platinum producers. Rising industrial uses of platinum, especially in the auto industry, might also worsen the situation.
The WPIC predicts a 5% slump in worldwide platinum demand. Experts credit this downfall to the global economic downturn and altered consumer preferences. Therefore, even though there might be new industrial uses and technological advancements, the yearly overall performance of platinum is likely to be affected.
It is foreseen that in-ground platinum reserves might shrink by 12% after a 17% drop in 2023, leading to a four-year low. Predictions for 2024 indicate that this supply-demand gap might spur investment and production strategy changes while dealing with an escalating problem.
Major industry players must invest in exploration activities, advanced mining technologies, and strategic partnerships to gain new resources. Concurrently, consumers might opt for recycling and using alternative materials due to the potential of high prices. These conditions advocate for effective supply chain management and pre-planned actions to deal with the predicted platinum scarcity.
