FX.co ★ Platinum Hits 11-Year High

In late September, platinum prices surged past $1,500 per ounce, reaching their highest point since July 2014. This increase reflects mounting concerns over supply and demand disparities, as evident in the significant backwardation seen in the futures market. The supply issues are largely due to declining mine output and a sluggish pace in recycling efforts. The World Platinum Investment Council has projected a 6% decrease in South Africa’s mine supply for this year. Although there has been a slight improvement in recycling, the volumes are still historically low, which leads to an anticipated 3% reduction in total platinum supply, bringing it down to 7.03 million ounces by 2025. Craig Miller, CEO of Valterra Platinum, has also cautioned that global primary production of platinum group metals might decrease by 20% by the end of the decade. On the demand front, while industrial use has dwindled due to reduced automotive production and decreased industrial activity, investment demand has seen a significant uptick. Additionally, the WPIC predicts an 11% increase in jewelry demand, reaching 2.23 million ounces by 2025, driven by a resurgence in China’s jewelry sector.