Edward Gardner

We forecast that platinum demand will increase by 5%-10% in 2023 from 2022, and that supply will remain broadly unchanged, leading to a smaller global surplus and slightly higher prices. On the demand side, the rapid increase in interest rates over the past 12 months in developed economies such as the US, UK and eurozone will weigh on consumer and business activity early this year, dragging on demand for platinum-intensive goods, but advanced economy demand should start to pick up again in the second half of the year. Moreover, the reopening of China’s economy will be a boost to demand all year. On the investment side, we think that the Federal Reserve will start cutting interest rates in the second half of the year, lifting investment-related demand. Finally, on the supply side, primary supply will probably struggle in Russia due to Western sanctions.

We forecast palladium demand to be fairly steady this year, whereas we forecast supply to marginally increase thanks to an increase in recycling. As a result, we forecast the global market deficit to narrow from an estimated 370,000 tonnes in 2022 to around 320,000 tonnes, and for the average price to fall. On the demand side, higher interest rates in developed economies will weigh on demand for palladium-rich internal combustion engine (ICE) vehicles, particularly early in the year. Moreover, the high palladium price in absolute terms and relative to the platinum price should lead to metal thrifting and/or substitution. But more positively for demand, vehicle production in many developed economies is still below pre-pandemic levels, suggesting there is some remaining pent-up demand. Moreover, demand in China should rise strongly as travel restrictions in the country ease. Finally, investment-related demand should pick up later in the year as the Fed starts cutting interest rates.