Platinum market outlook for 2025: UBS

Investing.com — UBS has launched its market outlook for platinum group metals (PGMs), forecasting that platinum will outperform palladium in 2025, though each are anticipated to lag behind gold and silver.

The report means that industrial exercise shall be a key issue driving the white metals market.

The financial institution anticipates that central financial institution price cuts and a possible weaker US greenback will positively affect the market, whereas potential tariffs might pose a detrimental menace. Nonetheless, UBS maintains a reasonably optimistic value outlook for platinum, partly pushed by the automotive sector.

“Whereas auto manufacturing was disappointing in 2024, there may be room for enchancment in 2025 if financial exercise will increase,” UBS strategists Giovanni Staunovo and Wayne Gordon stated in a notice.

Decrease rates of interest are anticipated to make automobile purchases extra inexpensive, which, coupled with the necessity to change ageing autos, ought to help autocatalyst demand.

One other optimistic issue, particularly outdoors China, is the slower tempo of car electrification, which is predicted to maintain robust demand for autocatalysts.

UBS predicts a provide deficit in platinum of 500,000 ounces, or 6.4% of demand, for 2025, marking the third consecutive yr of scarcity following deficits of 700,000 ounces in 2024 and 760,000 ounces in 2023.

The financial institution raises the query of when the discount in collected above-ground inventories shall be adequate for costs to replicate market tightness. Present estimates by the World Platinum Funding Council put these inventories at 3.5 million ounces, with UBS’s projections suggesting a lower to three million ounces by the top of 2025.

“We predict above-ground inventories have to go even decrease, nearer to 2 million ounces, to see costs reactive extra strongly to an undersupplied market,” strategists continued.

They count on a decrease mine provide however an elevated scrap provide. Whereas demand for autocatalysts is predicted to rise, UBS forecasts secure jewellery demand and a modest lower in industrial demand for the yr.

Costs for metals and oil within the US surged past worldwide benchmarks this week as merchants speculate that President-elect Donald Trump could introduce tariffs on imports.

In current weeks, vital value gaps have emerged between New York and London markets for metals like copper, silver, and platinum. Equally, oil value differentials between the US and Canada have widened.

These shifts replicate rising uncertainty in regards to the route of US commerce coverage beneath the brand new administration. The market volatility is creating alternatives for merchants to supply cheaper supplies overseas and convey them into the US.