Chemicals and sustainable technologies provider Johnson Matthey says the palladium and rhodium markets are likely to record smaller deficits this year, while platinum is likely to record a deficit of 600 000 oz on the back of lower primary supplies.

It states in its latest yearly ‘PGM Market Report’ that an anticipated recovery in primary and secondary platinum group metal (PGM) production fell short of expectations in 2023.

“Plant maintenance and electricity shortages hampered efforts to reduce work-in-progress at South African smelters and refineries, while the number of end-of-life vehicles entering scrapyards continued to decline, reducing PGM recoveries from automotive scrap by about 14%.

“Despite heavy selling of Russian PGM into the Chinese market, combined primary and secondary supply of platinum and palladium rose only slightly, while rhodium supply declined,” Johnson Matthey states in the report.

Automotive demand, however, exceeded expectations, with global light vehicle production having surged by nearly 10% to 88.9-million units.

Johnson Matthey says industrial demand was relatively robust, with glass demand having significantly exceeded expectations.

Chemicals demand for platinum and palladium fell short of recent highs, but remained elevated by historical standards, but the consumption of PGMs in the electronics sector was weak.

The company reports that investment demand for platinum and palladium moved back into positive territory in 2023, while jewellery demand recorded only a modest decrease.

Johnson Matthey does not expect significant changes in combined primary and secondary PGM supply this year, with a modest reduction in Russian sales and flat South African shipments forecast. Small gains in North American output are also expected this year, although the constrained price environment is impacting on miners’ profitability.

Combined primary and secondary platinum supply is expected to reach 7.02-million ounces this year, while demand is forecast to reach 7.61-million ounces. This would result in a deficit of just under 600 000 oz, compared with a deficit of 518 000 oz in 2023.

Palladium supply is estimated to reach 9.37-million ounces this year, while demand is forecast at 9.73-million ounces, resulting in a deficit of 358 000 oz. This compares with a deficit of 1.02-million ounces in 2023.

The rhodium market is expected to record a deficit of 65 000 oz this year, compared with a deficit of 125 000 oz in 2023. Supply is forecast to reach 999 000 oz and demand 1.06-million ounces.