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This year could potentially turn out to be quite an interesting year for platinum as a commodity and also as an investment, with the 2023 platinum market deficit of 878 000 oz forecast to be followed by a 2024 deficit of 418 000 oz.

In addition to automotive demand being poised to reach the seven-year-high figure of 3 297 000 oz, demand for platinum from stationary fuel cells and electrolysers is set to rise by more than 120%, amid green hydrogen projects getting under way in Europe, following oversubscribed auctions, and also in North America, where the Inflation Reduction Act is stimulating widespread development.

Contrasting sharply with this are the two substantial consecutive annual platinum supply deficits, plus a seeming momentous decline in above-ground stocks, which is kindling hopes of a much-needed price rise.

"We haven't seen the underlying fundamentals translate into price so far, for automaker inventory management reasons, but as the above-ground stocks are being depleted, you'd expect the residual above-ground ounces to require higher prices," World Platinum Investment Council (WPIC) research director Edward Sterck outlined to Mining Weekly in a Zoom interview to mark the publication of WPIC's latest quarterly report for the fourth quarter of 2023, along with a full 2023 year review and a revised 2024 forecast. (Also watch attached Creamer Media video.)

While demand rose above eight-million ounces last year, supply fell to seven-million ounces, the second-lowest figure since 2013, surpassed only by the Covid-hit 2020.

Even this year's 6% lower demand expectation easily outdoes the five-year demand average since 2019, while supply is projected to decrease still 1% further year-on-year.

"It seems that the automakers have effectively accumulated excess inventories of around a million ounces of platinum, and that roughly matches up with the with the major deficit of 878 000 oz that we estimate for 2023.

"We think what's happened is that during 2023, automakers effectively managed their new purchasing commitments to run down those excess platinum group metal inventories, and that effectively took the heat out of the market. That process is continuing to run through into the beginning of this year but we think it has largely now run its course," Sterck highlighted.

What has not run its course, however, is automotive demand for platinum, which is expected to hit a seven-year high in 2024, after having jumped 16% to 3 272 000 oz last year.

Traditionally, 40% to 45% of platinum has gone into exhaust treatment systems for internal combustion engine (ICE) vehicles and on the horizon is major potential demand for green hydrogen amid more than $300-billion in government subsidies being turned into green hydrogen projects that are under construction and being commissioned.

As green hydrogen demand grows, platinum offers investors a way of engaging with assets associated with compulsory global decarbonisation, with many companies advancing low-emission initiatives for implementation well ahead of the 2050 global deadline.

With various governments around the world continuing to announce green hydrogen subsidies, platinum-based hydrogen implementation could be pulled closer faster.

Mining Weekly: What is driving the ongoing high demand for platinum in the automotive sector at a time when ICE vehicle production is decreasing?

Sterck: That's a very good question. If we think about the overall drive train landscape, it seems quite possible that 2023 was the post-Covid high watermark for ICE vehicle production. In 2024, the outlook for ICE vehicles is lower than for last year, and yet we continue to see growth in demand for platinum for automotive applications. There are really two driving forces behind that. Firstly, we still expect increased platinum-for-palladium substitution to occur this year. That may begin to abate or even reverse in future ye...