1 December 2022: The nature and size of platinum above ground stocks now locked up in China combined with the 2023 forecast deficit could materially impact price discovery: China’s significant excess platinum imports since 2019 have resulted in a flow of metal out of Western vaults and into China and in 2020 and 2021 match or exceed the platinum market surpluses estimated for 2021 and forecast in 2022. The timing of China’s platinum purchases has been highly price opportunistic, which suggests that there is a quasi-speculative component to them. However, there has also been a step-change in total volumes since early 2021, indicating that there may also have been an increase in real demand. The concentration of above ground stocks in China leaves limited excess inventory in the rest of the world to meet any market imbalances, such as the 303 koz deficit forecast for 2023. 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.
Platinum Perspectives
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