Platinum is a precious metal relatively scarce, with limited global production. It is often found in association with other metals, such as nickel and copper, in ores.
Platinum has excellent resistance to corrosion, high melting and boiling points, and good catalytic properties. These attributes make it valuable in various industrial applications. It is used in catalytic converters for automobiles to reduce harmful emissions, as a catalyst in the chemical industry, in electrical contacts, and in laboratory equipment.
In the past couple of months, platinum prices have fallen more than 17%:
Investors should consider buying the dip as the global platinum market is expected to rack up its largest deficit since the 1970s as the world’s largest producer, South Africa, battles with power outages.
South Africa accounts for 70% of global platinum output, and its annual production amounted to about 140 metric tons amid shortages in 2022.
According to The World Platinum Investment Council (WPIC), global platinum demand should surge 28% this year to 8.2 million ounces as more automakers replace expensive palladium with platinum in car catalytic converters.
Metals Focus added, "With power outages in South Africa limiting supply, the global deficit could increase to 953,000 ounces from 53,000 ounces in 2022.”
For investors that would rather not buy the platinum futures, they can consider Graniteshares Platinum Shares ETF (PLTM) and/or Physical Platinum ETF (PPLT).
On the date of publication, Andy Mukolo did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
