“Edward Sternck’s Platinum Boom: Catalysts for Record Prices & Deficits!

The platinum market is on track for a record deficit in 2021, mostly due to the ongoing supply crunch. This is great news for platinum producers and investors, as rising prices could provide a nice boost to those looking to capitalize on the situation. The current supply crunch for platinum is largely due to a combination of factors, including the Covid-19 pandemic’s disruption of South African mine operations and the fact that auto-catalyst recycling has been greatly reduced in recent years due to cost-cutting measures. The latter point is particularly important, as auto-catalysts are the biggest source of platinum demand. The deficit is also being driven by growing demand from the investment community, led by ETFs, which are increasingly shifting into platinum. This demand will likely continue to grow in 2021, as platinum-backed ETFs are set to launch in the UK and US. In terms of the outlook for platinum prices, Edward Sterck – head of Base Metals Research at BMO Capital Markets – says that they will continue to rise “if the fundamentals of the market remain unchanged.” As the supply crunch continues, Sterck believes that the price could hit US$2,000 per ounce by the end of 2021. Aside from those focused on the investment side of the equation, there are several potential catalysts in play for platinum prices. The most important of these is the continued recovery of the automotive industry. As car sales increase and the demand for auto-catalysts increases, platinum production and prices are likely to benefit. Finally, new and potentially disruptive technologies, such as fuel cell electric vehicles (FCEVs) and hydrogen-powered cars, could also play a role in driving platinum higher. These technologies are still in their infancy but if they become widely adopted in the coming years, it could drive platinum demand even higher. In conclusion, the platinum market is on track for a record deficit in 2021 and this could be a great opportunity for producers and investors. Platinum prices are likely to be supported by several factors, including a continued recovery in the auto industry, sustained investment demand from ETFs, and the possible adoption of FCEVs and hydrogen-powered vehicles.