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Investing.com – UBS released its market outlook for platinum group metals (PGMs), which it predicts will pass by 2025, although both are expected to lag behind and .
The report suggests that industrial performance will be the key factor driving the white metal market.
The bank expects that the reduction in the rate of the central bank and the US dollar may be weak will have a positive effect on the market, while the possible rates may cause a negative threat. However, UBS maintains a modest price outlook for platinum, driven in part by the auto sector.
“While auto production was disappointing in 2024, there is room for improvement in 2025 if economic activity picks up,” UBS strategists Giovanni Staunovo and Wayne Gordon said in a note.
Low interest rates are expected to keep car prices low, which, along with the need to replace old cars, should support autocatalyst demand.
Another positive, especially outside of China, is the slow pace of electric vehicles, which is expected to maintain strong demand for autocatalysts.
UBS forecasts a platinum supply shortfall of 500,000 ounces, or 6.4% of demand, for 2025, marking the third consecutive year of shortages after shortfalls of 700,000 ounces in 2024 and 760,000 ounces by 2023.
The bank raises the question of whether the decline in the accumulated output will be enough for prices to reflect the strength of the market. Current estimates by the World Platinum Investment Council put the inventory at 3.5 million ounces, and UBS estimates suggest a decline to 3 million ounces by the end of 2025.
“We think top yields need to drop further, closer to 2 million ounces, to see prices react strongly in an undersold market,” the strategists continued.
They expect a lower mine supply but an increased scrap supply. While demand for autocatalysts is forecast to rise, UBS predicts stable demand for jewelry and a slight decline in industrial demand for the year.
U.S. steel and oil prices rose above international benchmarks this week as traders speculated that President-elect Donald Trump could introduce tariffs on imports.
In recent weeks, large price gaps have appeared between the New York and London markets for metals such as , silver and platinum. Likewise, the oil price differential between the US and Canada has widened.
These changes reflect growing uncertainty about the direction of US trade policy under the new administration. Market volatility creates opportunities for exporters to source cheap goods from abroad and bring them to the US.
