POLL-Global economic concerns drive down 2024 platinum, palladium forecasts

Credit: REUTERS/Alexander Manzyuk

By Ashitha Shivaprasad and Polina Devitt

LONDON, July 27 (Reuters) - Analysts and traders have lowered their price forecasts for platinum and palladium in 2024 as concerns about a global economic slowdown reduce demand, a Reuters poll showed on Thursday.

The two sister metals are used primarily by automakers, which embed them in engine exhausts to reduce emissions. Platinum is also used in other industries, jewellery, and for investment.

The median forecasts from a survey of 27 analysts and traders were for platinum to average $1,100 an ounce in 2024. That is down from a forecast of $1,134.5 for 2024 returned by a poll three months ago. COMMODS-PLAT

Platinum is down nearly 10% so far this year after rally in April-May when power outages and operational challenges in top producer South Africa inflated risk of limited supply and gold was soaring.

"Supply risks in South Africa could not overcome a weaker demand profile fuelled by poor economic performance and inflationary pressure," said independent analyst Robin Bhar.

China's platinum industrial demand is expected to rise 3.5% this year after 14% compound annual growth in 2018-2022, he said, adding that platinum prices would strengthen once the U.S. Federal Reserve reaches the end of the rate hiking cycle and prospect of rate cuts starts to loom.

For palladium, the poll forecast average prices of $1,368.75 an ounce in 2024 -- down from a forecast of $1,513 in the previous poll. COMMODS-PALL

Palladium XPD= is down 30% so far this year and touched the lowest level in four and a half years in July as rapid rise of palladium-free electric vehicles threatens to hammer demand for the metal in coming years.

"Although the fundamentals are set to evolve less favourably for palladium, tight supply means a price rebound cannot be ruled out before a more sustained move lower," said Suki Cooper at Standard Chartered.

All the three analysts who provided their supply-demand estimates expect platinum market to be in deficit this year and in 2024. They also agree that palladium would be in deficit in 2023 but two of the analysts expect it to swing to surplus in 2024.

PGM Metal Prices https://tmsnrt.rs/3rQFicl

(Reporting by Ashitha Shivaprasad and Polina Devitt; editing by David Evans)

((polina.devitt@thomsonreuters.com; Reuters Messaging: polina.devitt.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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