Modern Mining January 2025

Jewellery demand for platinum appears to be moving beyond the low of 2023.

automotive demand for platinum despite rising battery electric vehicle (BEV) market share and a reduction in ICE vehicle production, supported by factors including stricter emissions legislation, ongoing increased demand for hybrid

a 12% rebound in recycling supply to 1,774 koz as improvements in the autocatalyst recycling supply chain continue. In contrast, mine supply is expected to drop by 2% to 5,550 koz as the restructuring initiatives to curtail unprofitable

vehicles, where platinum loadings are higher, and platinum-for-palladium substitution. The anticipated decline in annual automotive platinum demand due to electrification of the global fleet will happen much slower than most had expected, with only 1% per annum of demand erosion projected to occur

ounces undertaken last year take effect. However, it is our view that downside risk is attached to this year’s supply outlook, not least the ongoing impact of the PGM basket price on mining sustainability. There is also potential for some overhang in the bottlenecks that have beset recycling. At an estimated 7,951 koz, demand in 2024 was buoyant and narrowly exceeded that of the previous year, although the picture was complex – especially as cyclical trends in industrial demand played out. Automotive demand

The anticipated decline in annual automotive platinum demand due to electrification of the global fleet will happen much slower than most had expected, with only 1% of demand erosion projected to occur between 2023 and 2028, when it will still be around the 3,000 koz level.

between 2023 and 2028, when it will still be around the 3,000 koz level. In terms of automotive demand

for palladium, our research estimates that the market remained in a substantial deficit of around a million ounces last year, with total demand down 3% year on year, of which 8,350 koz was automotive demand (down

dropped an estimated 2% to 3,173 koz as global light duty vehicle production fell by 1% to 90.4 million units and heavy duty vehicle production also slowed. Platinum-for-palladium substitution grew to just over 750 koz; it remains a significant component of overall platinum automotive demand and is expected to continue to grow this year. In 2025, automotive demand for platinum is forecast to reach an eight-year high, growing by 2% to 3,245 koz, driven by both substitution and the growth in hybrid and commercial vehicles which will more than offset fewer pure-internal combustion engine (ICE) passenger vehicles. Longer term, our research demonstrates the resilience of

1% year on year), and supply broadly stable. In 2025, the deficit is expected to reduce because of slightly lower demand and an increase in recycling supply due to an improvement in the availability of scrap material. Thereafter, looking through to 2028, we expect the palladium market to remain in deficit before eventually transitioning to surpluses. However, this is predicated on a significant forecast increase in palladium recycling supply, an outlook which is not without its risks given the recent headwinds facing PGM recycling and the possibility that these may take longer to resolve than current expectations suggest.

JANUARY 2025 | www.modernminingmagazine.co.za  MODERN MINING  21