The backlog entails about one million oz. of PGMs that accumulated during processing plant interruptions last year.
The report contrasts against a report published by The World Platinum Investment Council on Monday that said the global platinum market was expected to be more undersupplied this year than it previously thought as economic recovery fuels a surge in demand from industry.
The platinum price appears to have stabilised around $1,200 per oz. following steady growth over the past 12 months from a March 2020 low below $600 per oz.
Palladium and rhodium recorded record high prices early in 2021.
Johnson Matthey says the higher price levels are hitting investment, with Japanese bar purchasing turning negative in early 2021 and ETF buying subdued. According to the report, Chinese retailers stocked up on platinum jewellery in the second half of 2020, but the recovery has stalled due to a narrowing discount to gold.
In contrast, the palladium and rhodium markets are expected to remain in deficit in 2021. Both metals recorded all-time high prices in early 2021, with palladium climbing above $3,000 and rhodium repeatedly surging to $30,000.
In response, automakers have accelerated thrifting and substitution programmes, seeking to reduce the use of these metals in gasoline autocatalysts. Despite this, both palladium and rhodium will see double-digit growth in automotive demand in 2021 as vehicle output rebounds and primary markets phase in tighter emissions regulations and more stringent test procedures.
“The overall PGM content of catalyst systems are still rising, in line with tightening emissions legislation in many regions,” says Rupen Raithatha, market research director, in a media statement.
According to the analyst, the auto sector is also supporting palladium and rhodium demand, despite aggressive thrifting and substitution programmes at virtually all global automakers.
Supporting the higher price levels is platinum’s rising share of the auto PGM mix, and demand for platinum in gasoline cars is expected to climb steeply in 2021, albeit from a low base.
Demand for platinum in gasoline cars is expected to climb steeply in 2021.
Platinum will also benefit from the phase-in of China VI emissions legislation. According to Raithatha, meeting China VI limits requires a complete overhaul of heavy-duty diesel catalyst systems. He expects loadings on Chinese diesel trucks to more than treble this year.
High prices will also incentivise increased recycling of PGMs from scrapped vehicles, but platinum recoveries will be constrained by technical difficulties in treating diesel particulate filter scrap.
The ‘minor’ PGMs, ruthenium and iridium, have seen steep price gains during early 2021, reflecting strong industrial buying, disruptions to South African supply, and rising investor awareness of the potential for PGMs’ use in hydrogen applications.
