Modern Mining January 2023

Despite these challenges, platinum automotive demand has been remarkably resilient. In 2022, it grew by 12 per cent and the forecast is for 11 per cent growth in 2023, to reach 3 288 koz. Arguably, growth forecasts seem optimistic given economic predictions, but several factors support this trend. Firstly, vehicle production is still well below where it would normally be, even on an adjusted basis to allow for the recessionary economic outlook. Secondly, the market share of hybrid vehicles, which contain higher platinum group metal (PGM) loadings per vehicle than diesel or gasoline vehicles, is grow ing. Thirdly, platinum substitution for palladium will continue apace, surpassing 500 koz in 2023, up from 340 koz in 2022. Further, full implementation of China 6 and China VI emissions legislation by July 2023 will see platinum automotive demand in China alone reach almost 700 koz, some 2.7 times higher than pre-pandemic levels. Changes in global vehicle production have a greater impact on the palladium market where more than 80 per cent of use is in automotive applica tions, primarily in gasoline engine vehicles. Vehicle production rising in 2023, albeit to levels still below recessionary demand, will also drive palladium auto motive demand growth, although at a slower rate as platinum substitution escalates. Similar to automotive platinum demand, the robustness of the expected growth in industrial demand for platinum is rooted in strong foundations which leave it well-insulated from the recession ary outlook. To put 2022 and the outlook for 2023 in context, 2021 was a record year for industrial platinum demand, reaching 2 450 koz. This was largely due to glass manufacturing capacity expan sions which were not repeated in 2022, resulting in 2 110 koz of demand, a reduction on the prior year. In 2023 industrial demand is due to be the second highest year on record, with a forecast of 2 316 koz. Again, much of this growth is due to capacity expan sions in the glass industry, which have already been committed, meaning they will go ahead irrespective of economic conditions, so providing a high degree of predictability. Conversely, jewellery demand is struggling to reach pre-pandemic levels of demand, with the key China market remaining weak. Growth in other regions, especially the US, Japan and India, has, how ever, partially offset the decline in China. Demand in 2022 reached 1 953 koz, flat on the previous year and some 7 per cent below 2019. The outlook here is more uncertain as this segment of platinum demand could be more susceptible to recessionary pres sures. The uncertainty as China moves away from its zero-COVID strategy adds further risk to the 2023 forecast, which is again flat at 1 954 koz. In 2023, investment demand is expected to shift dramatically from negative investment demand of 525 koz in 2022 to positive investment demand of

212 koz. Bar and coin demand is fore cast to grow by 49 per cent to 507 koz, primarily due to a reversal of disinvestment in Japan, but also improved product availability

in North America and Europe. Exchange stock and ETF out flows will abate. Platinum is benefiting from

the emergence of hydrogen related applications as a new end-use demand segment. With the focus shifting to COP 28 later this year, the need to decarbonise the world is more acute than ever and hydrogen produced in platinum-containing electrolysers and used to displace natural gas, or as an energy source in fuel cell electric vehicles, will have a significant role to play in the energy transi tion. Hydrogen-related demand for platinum is expected to grow substantially through the 2020s and beyond, reaching as much as 35 per cent of

Bar and coin demand is forecast to jump 49 per cent in 2023, driving overall investment demand positive. Picture credit: ABC Bullion.

total platinum demand by 2040. Although this demand is a relatively small compo nent in 2023, small changes in demand can have an outsized impact on price setting in a market in deficit. Demand growth for i r idium and ruthenium, used alongside platinum in electrolysers and fuel cells respectively, is also likely as green hydrogen supports decarbonisation. Concerns that availabil ity of these metals, that are among the

Picture credit: Fuel cell stack, Bosch. Picture credit: Johnson Matthey.

rarest of the PGMs, could constrain platinum-related green hydrogen applications have been significantly allayed following technical developments that have improved metal efficiencies and recycling. For exam ple, a breakthrough in 2020 provided a platinum and iridium-based hydrogen electrolyser catalyst using up to 90 per cent less iridium, while improving per formance threefold. In addition, as platinum supply grows to meet the demand for hydrogen applica tions, more of these minor PGMs will be produced from the polymetallic orebodies. 

Platinum is benefiting from the emergence of hydrogen related applications, including electrolysers to produce green hydrogen and fuel cells, a new end-use demand segment.

Manufacture of emissions control catalysts.

January 2023  MODERN MINING  15