Not All That Glitters Is Gold: Here’s How Platinum Stocks Are Faring in 2023

Key takeaways

• Platinum is facing a supply shortfall for the first time in years thanks to South African power outages and car industry demand
• The price of platinum and investment interest could spike in 2023 and beyond
• Platinum mining companies’ share prices and ETFs are down this year, but fortunes could change if platinum prices skyrocket

Platinum: a rare metal with a number of uses, including vehicles, jewelry and fuel processing. After a surplus for the last couple of years, we’re now expected to see a global deficit in platinum for 2023, pushing prices up and making it an attractive investment option once more. Keep reading to find out what’s driving platinum prices and who the leading players are.

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What’s happening in the platinum market?

The platinum market has some interesting circumstances that could dictate prices for the next few years. Three-quarters of the world’s platinum supply comes from South Africa, which has been suffering from power outages and reduced refining capacity as a result.

Vehicle manufacturers have also ramped up their platinum use thanks to tapping out the palladium market, which is now undersupplied. Platinum is currently cheaper — it’s currently $1,050 an ounce compared to palladium’s $1,500 an ounce — so it’s a natural switch for the automotive industry, which uses both for cleaning exhaust fumes.

Thanks to this, there could be a pretty strong uptick in platinum prices this and next year, as the World Platinum Investment Council (WPIC) now predicts there will be a 983,000-ounce deficit in the rare metal for 2023. This makes platinum stocks an attractive option with plenty of upside potential.

The major platinum companies

Most major platinum companies are based in South Africa. Anglo American Platinum produces 38% of the world’s platinum, but it’s been dogged by power outages in South Africa that’s decreased refining by 6% and dimmed the company’s outlook — the share price is down 22% this year.

It’s a similar picture for competitor Impala Platinum, which is down 32% this year. However, both companies have seen massive gains over a five-year period, and with platinum prices set to pick up, these miners could see the stock price fortunes reversed.

There are three US platinum exchange-traded funds (ETFs). The GraniteShares Platinum Trust ETF has only dipped slightly in 2023, while the abrdn Physical Palladium Shares ETF is down 11% in the same time period.

For those inclined, you can also buy platinum coins and bars which increase or decrease in value according to how the price is faring. The WPIC reported a 71% increase in demand year-on-year in the first quarter of 2023.

The bottom line

After a three-year slump the platinum market is potentially picking up again. Would-be platinum investors should do their research into individual stocks or ETFs depending on their risk appetite, but we could be set to see a boom in platinum prices as the deficit continues.

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