Power failures at South Africa mine and increased demand from automakers. And the hydrogen industries will cause supply constraints, platinum prices have skyrocketed.
In addition to being use in jewellery and other industries, platinum is also employ to reduce dangerous engine emissions. Prices shot up from little over $900 per ounce in late Feb to $1,132.17 on April 21 — the highest in more than a year — before falling to about $1,050 on Tuesday.
According to exchange data, speculative speculators’ net long positions in platinum futures on the NYMEX has increased from 145,000 to 1.5 million ounces.
According to the World Platinum Investments Council (WPIC). Which keeps track of funds, exchange traded funds (ETFs) that store platinum for their shareholders purchased over 120,000 ounces in a matter of days in late April.
According to Standard Chartered analyst Suki Cooper,”we believe this is the first year of repeated deficits in the platinum market.”
Cooper did note that prices might drop temporarily before supply issues intensify later in the year.
The majority of the world’s mined platinum supply—roughly 70–75%—is produced in South Africa. According to the miners there, rolling power outages might reduce their output this year by 5% to 15%, Cooper said, adding that Russian manufacturing might also fall short.
As South Africa enters its winter season, she noted, there will be more frequent alerts about power outages. The marketplace is worried.
As vehicle manufacturing rises, demands from the auto industry, the largest user of platinum, should increase by 8% this year. According to StoneX analyst Rhona O’Connell.
In the approximately 8 million ounce per year platinum market, O’Connell predicts a shortage of 900,000 ounces this year. The WPIC estimates that there will be a shortage of about 500,000 ounces.