Due to higher processing of stockpiles through the quarter, the report said that platinum supply is expected to rise to a surplus of 769,000 ounces.
“It has been a dramatic quarter for platinum to say the least.
The supply surplus comes as Anglo-America Platinum has increased production of its platinum stockpile, which was built up through 2020 after its converter plant exploded early last year.
Although platinum is seeing new surpluses, Raymond said that it wouldn’t take a significant increase in demand to bring the market back into balance and or even into a deficit.
While automotive demand has been an essential pillar of strength, investment demand has been a mixed bag for platinum.
However, Raymond explained that those outflows have been offset by strong demand for physical bars.
While this forecast of 402 koz is below the record of 586 koz in 2020, it is still over 50% higher than the annual average bar and coin demand for the seven years prior to the pandemic,” the report said.
Raymond added that robust bar and coin demand strongly indicate that investors use platinum to hedge against rising market risks and inflation threats.
Raymond also noted that one of the biggest unknowns for the platinum market remains the evolution of the hydrogen economy.
“You just aren’t going to be able to generate enough electricity with solar and wind power.