Demand for Platinum Bars and Coins will Rise by 123% 

In the 3rd quarter of the year, both the supply and the demand for platinum dropped because of the Covid-19 crisis. 

The paralysis of the activity of many mines due to measures to control the coronavirus and the slowdown in the world economy have been decisive factors. However, the interannual growth in investment in physical platinum is estimated at 123%.

The World Platinum Investment Council carried out the quarterly report corresponding to the third quarter of 2020. According to it, the supply and demand for this metal recovered significantly in the July-September period, compared to the previous quarter. 

Despite this, global figures point to a supply deficit of 700,000 ounces (21.77 mt) in the third quarter, which will rise to 1.2 million ounces (37.3 mt) by the end of the year.

The forecast for 2021 is a supply deficit of 220,000 ounces (6.84 Mt).

Paul Wilson, CEO of the World Platinum Investment Council points out that both supply and demand for platinum have rebounded significantly in the third quarter, with mines returning to full operation. Demand from the automotive and jewellery sectors are experiencing a V-shaped recovery. However, the forecasts regarding supply and demand will continue to be subject to change due to the effects of the pandemic.

Supply

Platinum supply from mining fell 2% year-on-year to 1.49 million ounces (46.4 mt) in the third quarter. The significant drop in production in South Africa (-6%) and North America (-10%) has not been offset by the increase in Russia (+15%) and Zimbabwe (+4%).

Despite this, South Africa remains the world’s leading platinum producer, with 1.05 million ounces (32.8 MT) in the third quarter of 2020, doubling the figure for the same period in 2019.

Russia was second with 200,000 ounces (6.2 MT) and Zimbabwe third with 121,000 ounces (3.76 MT).

Regarding recycling, the figure for the third quarter was 505,000 ounces (15.7 tons). It came in 6% less, than in the same period of the previous year.

Demand

Total platinum demand for the third quarter was 2.64 million ounces (82.3 MT), 32% more than in the previous quarter.

Demand from the automotive sector recovered slightly between July and September, to 660,000 ounces (20.5 MT). The figure is only 2% lower than in the third quarter of 2019.

The jewellery sector registered a slight recovery. Demand was 498,000 ounces (15.5 Mt) or 27% more than in the second quarter.  But still 3% below the figure for the same period last year.

Industrial demand continues to be affected by the paralysis of economic activity caused by the pandemic. The third-quarter figure was 509,000 ounces (15.8 mt), 45% more than in the previous quarter. However, it was still 10% below the 2019 figure.