Precious metal Platinum set for best quarter since 2008 on supply concerns

Hannah Ward-Glenton @CNBC

The price of Platinum is up over 20% since late September, and the metal is set to experience its best quarter since 2009.

Platinum rose another 5% Thursday to trade at $1,054.86 per troy ounce Friday, up around 22% compared to the start of the quarter.

If the precious metal surpasses a 19.89% uptick this quarter — last seen at the start of 2009 — it will be the biggest quarterly increase since the first quarter of 2008, when it gained a staggering 33.96%.

China has imported excessive amounts of platinum since 2019, according to the World Platinum Investment Council, which has left a limited above-ground supply for the rest of the world.

“This, in combination with higher prices likely being needed to release Chinese inventories to the domestic market, could have a significant bearing on platinum market price discovery,” according to the Council’s Platinum Perspectives report in December.

The Council anticipates a platinum deficit in 2023, with demand growing by 19% while supply increasing by just 2%. Despite international economic turbulence, with many countries already in, or expected to tip into, recession, industrial demand for platinum will be up 10% compared to 2022, which exceeds the 10-year average, according to a press release by the WPIC.

Demand for platinum in the automotive industry will also continue to grow next year, while jewelry-based demand for platinum is forecasted to remain constant throughout 2023.

Platinum has gained 9% in 2022, according to Reuters data, beating other precious metals. Gold has lost around 1%, silver is up around 3%, and palladium has fallen 4%.

A knock-on effect

Stocks linked to platinum are also posting strong quarterly gains, including Impala Platinum which added 31.7%. Anglo American Platinum and Sibanye Stillwater followed, gaining 21% and 17.6%, respectively, leading up to Dec. 27.

The platinum market posted a deficit in 2020 after the onset of the coronavirus pandemic brought industry to a standstill. The market saw a period of recovery in February 2021 when the metal touched a six-year high as industrial demand improved and investors weighed up platinum’s importance in the global transition to clean energy.