Platinum is approaching its best time of the year due to the seasonal trend of metal gaining from mid-December and over the first couple of months of the following year. This is a pattern that has stood over the last 25-30 years. Is this a great time to go long?
Platinum demand is greater than Platinum supply
There is a basic fact to this metal market that demand for platinum is outstripping its supply.
The bar chart below shows the annual supply changes from 2019 -2020 in the platinum market. The left-hand side is the 2019 supply print. The right-hand side is the 2020 forecast supply.
And now, for the demand side of the equation.
The right-hand blue bar shows the demand for 2019 and the right blue bar shows the demand forecasted for 2020. Now, notice a deficit of -1,202 koz compared to an estimate of just -336 koz three months earlier.
However, then take a look into the future and you can see that demand is expected to rise in 2021 to 8089 koz – look at the chart below on the right-hand side.
And the supply side for 2021? Well, it’s still below the demand level.
So platinum is a market where demand is expected to outstrip supply for the end of this year and throughout 2021. Furthermore, there is a strategic role for platinum in the growth of the hydrogen economy too, so demand could expand even further. There is a lot more to be said, but you can access some of the latest research from the World Platinum Investment Council here. Read pages 1-6 for a decent summary and page 4 for the investment case in a nutshell.
This could very well be a great time to go platinum!