Platinum deficit increases amid high demand from carmakers
According to the latest industry reports, the platinum market is going through one of the biggest deficits as demand rises.
One of the major uses of platinum and palladium is in vehicle exhausts, as it has the ability to cancel out harmful emissions. For now, there's a massive demand for platinum metal, but the market is going through an undersupply which has disturbed the supply chain.
It's been years since the demand for palladium increased while the market remained undersupplied. This kept the prices of palladium high since there were more buyers. On the other hand, the consumption of platinum was low, and it was readily available in the market, which kept its prices low.
Shift From Palladium To Platinum
It appears that the auto market is going through a major shift right now as it moves to platinum from palladium. According to experts, this move from palladium to platinum will help companies to save money.
In addition, the production of cars that use platinum is also rising, which is yet another factor contributing to the increased consumption.
Similarly, platinum metal also has a lot of uses in jewelry and other industries. On the contrary, the use of palladium is mostly found in the auto sector.
This shift has led to a decrease in the prices of Palladium and a good recovery in platinum metal prices.
According to one expert, the platinum market will face 128,000 ounces worth of undersupply this year. Considering how the market had a 740,000 ounces surplus last year, that's a major shift!
Furthermore, the World Platinum Investment Council is also hinting toward a deficit of 983000 ounces. If this turns out to be true, that would be one of the biggest deficits since 2014!
Consultants Metal Focus which is also a well known-name also forecasts an undersupply of 953000 ounces in the platinum market.