People ask CPM how it is possible that platinum prices could have fallen by more than half since 2008 while there have been large and persistent deficits of newly refined platinum compared to demand.

The answer is simple. This has not happened. There have been no large and persistent deficits. The platinum market has been in a heavy surplus balance throughout most of the past half century, in fact, surpluses that continue into 2024.

The idea that the platinum market has been in a deficit is a marketing construction. It is not real.

The implications for misdirecting private and government investments into platinum mining are discussed at the end of this Market Alert.

The first chart here shows CPM’s estimates of platinum’s market balance, surpluses and deficits since we began researching this market in the late 1970s. It compares CPM’s estimates to actual prices. The prices track the supply and demand fundamentals well, and the fundamentals explain the levels, trends, and changes in prices.

One needs to know who bought the surpluses in the late 1980s and early 1990s, and who bought the surpluses in the period after 2001 to understand the difference between the flat price response in the 1980s and 1990s and the surge in prices after the turn of the century. Knowing that, the relationship between surpluses and deficits and prices is clear.

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