2024 Precious Metals Outlook: Platinum, Palladium, and Rhodium Forecast

2024 PRECIOUS METALS OUTLOOK: PLATINUM, PALLADIUM, AND RHODIUM FORECAST

POSTED BY PATY MAK

As we approach 2024, let’s explore the landscape of the Platinum Group Metals (PGM) market for the upcoming year, based on a detailed analysis from the Heraeus Precious Forecast 2024. In this comprehensive overview, we highlighted the key points of the predictions for Platinum, Palladium, and Rhodium, with their respective price projections and industry dynamics (supply and demand), offering valuable insights into the challenges and opportunities that lie ahead.

PLATINUM

Platinum is expected to maintain a deficit in 2024, projecting a deficit of 445 koz (kilo ounces), with robust growth in global demand reaching 7.5 moz (million ounces), indicates the Heraeus Precious Forecast 2024. They also predict that the global platinum supply will slightly decrease to 5.6 moz in 2024. South African production may rise due to improved power supply, but challenges persist: including falling PGM prices, potential mine closures, and reduced output. Secondary platinum supply, from autocatalyst recycling, is predicted to remain weak, with limited recycling due to high new vehicle prices and semiconductor chip shortages, affecting material availability.

Platinum demand for autocatalysts is estimated to remain stable at 3.5 moz, with a 1% year-on-year growth, while industrial demand is expected to remain steady at 2.3 moz, offsetting challenges in the glass sector with increased demand for petroleum catalysts and electrical usage.

Platinum is projected to trade between $800/oz and $1,100/oz in 2024, influenced by a market deficit, macroeconomic weaknesses, and the potential impact of mine closures, with the South African rand's depreciation providing limited price support.

PALLADIUM

The Heraeus Precious Forecast 2024 Report expects the Palladium market to have a significant deficit in 2024, driven by subdued secondary supply from recycling, improved primary supply in South Africa and North America, and a decline in demand due to platinum substitution and limited growth in Internal Combustion Engine (ICE) light-vehicle production. Supply risks include potential production cuts in South Africa and North America due to lower prices impacting revenues. Secondary supply may remain subdued due to the semiconductor chip shortage's impact on new vehicle production and delays in autocatalyst recycling in China.

Palladium demand from the automotive sector is forecasted to drop by 3% to under 8 moz in 2024, influenced by slowing light-vehicle production growth, increased market share of Battery Electric Vehicles (BEVs), and the wider use of platinum in gasoline autocatalysts. Industrial requirements for palladium are expected to decrease as cost-reduction efforts lead to thrifting in electrical and dental demand, with the latter also shrinking due to alternative materials.

The palladium price is expected to trade between $700/oz and $1,200/oz in 2024, with room for further decline as the market returns to historically normal levels despite the expected deficit, as reported by Heraeus.

RHODIUM

The rhodium market is forecasted to be in a slight deficit in 2024, with a minor decline in primary supply and a small fall in demand. The Heraeus Precious Forecast 2024 explains that primary rhodium supply is expected to dip slightly, primarily in South Africa, with potential risks from power cuts and production cuts due to falling PGM prices. Secondary supply may continue to be weak, with elevated second-hand car prices and the possibility of prolonged vehicle ownership, along with potential scrappage rate reductions during a recession.

Rhodium automotive demand is forecasted to drop by 5% to 955 koz in 2024, influenced by BEV adoption and slight thrifting. Industrial demand is predicted to increase slightly, particularly in sectors other than autocatalysts.

Heraeus estimates rhodium to trade between $3,500/oz and $6,500/oz in 2024, reflecting a more normalized market. Weaker net demand may pressure the price, but the risk of supply reduction from mine closures in South Africa provides upside potential.

 

 

Those involved in catalytic converter recycling should closely monitor these 2024 forecasts, considering potential impacts on precious metal prices and market dynamics. Strategic decisions aligned with the anticipated trends in platinum, palladium, and rhodium can assist in navigating challenges and capitalizing on opportunities in the evolving PGM landscape.