The World Platinum Investment Council is extremely bullish for 2021.
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The World Platinum Investment Council (WPIC) released a report with a bullish view of the platinum market in 2021.
The WPIC is bullish on the basis of stronger investment demand and restricted production in South Africa.
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Platinum in deficit
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The WPIC is predicting a record deficit of 1.2 million ounces in 2020. The projected deficit would mark a sharp uptick up from a deficit of 100,000 ounces in 2019.
The report states supply in 2020 fell by 18% due to virus-induced lockdowns. Meanwhile, demand fell only 5% as automakers managed to maintain output, resulting in a deficit of -1,202 Koz. Not only that but earlier this year Japan’s Prime Minister mentioned the government plans to use 100 % renewable energy to create hydrogen in Fukushima. He also stated that the government would make a strong effort to promote FCV as a 1st choice before the current petrol and diesel engines. Nowadays an FCV uses 10 times more platinum.
Next year, the council is expecting demand growth of 2%. Automotive will increase demand because the new, tighter Euro 6 emission standards in Europe come into effect.
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Platinum boosters
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Resilient automotive demand this year and an expected return to the growth of Chinese jewelry demand have boosted platinum. In addition, platinum’s role in the hydrogen economy as a catalyst in the hydrolysis of water has also driven investor sentiment.
Lockdown restrictions in top producer South Africa have suppressed supply in 2020.
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Investor interest in platinum
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Finally, investor interest in platinum is also expected to drive the price higher.
From the period of December through to February Platinum has gained in value in 24 of the last 25 years, so it could be a great time to buy. On top of this rising price, Platinum is also projected to have a 2020 supply level of 6738 Koz. This is versus the demand of 7940 Koz. So this means there is a supply shortage to meet demand.
Furthermore, projected supply levels according to the World Platinum Investment Council are expected to rise to 7865 Koz. However, demand is again expected to exceed supply in 2021 with a level of 8089 Koz.
With these suppressed levels maybe it is not a bad idea at all to stack up a couple of Platinum Coins in your portfolio: Check our platinum products.
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Gold-Platinum Ratio
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