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Could platinum help recoup the world’s economic losses post-pandemic?

Penelope Cruz wears a platinum and fancy-shape diamond line bracelet weighing 43cts from Chopard at the 2012 Oscars. (Getty)

The World Platinum Investment Council has revealed that platinum demand now outstrips supply for 2020 and 2021.

This is according to the 25th edition of its Platinum Quarterly report, released today.

It also suggested that the metal could aid in economic recovery post-pandemic, if prices are to rise as forecasted, and even said that it could offer a more environmentally friendly alternative to metals like gold.

Paul Wilson, CEO of the World Platinum Investment Council, explained: “As we now consider the economic cost of the pandemic, platinum has a role to play in providing other solutions.

“Questions are being raised about how quickly we transition from the internal combustion engine to electric vehicles, and the vast sums needed to support the associated infrastructure.

“Platinum plays a key role in the production of green hydrogen and in fuel cells for electric vehicles. Material demand growth from this will be realised in a five- to 10-year period.

“However, the interest of many investors, who had not previously considered platinum, has been piqued by this strategic underpin to the long-term demand for this unique metal.

“When these investors take a closer look, they see that platinum’s deep discount to gold and palladium and the cost effectiveness and low CO2 of the mild-hybrid diesel powertrain greatly enhance the likelihood of investment demand growth.”

Elsewhere, though, the precious metal is performing well in jewellery markets around the world too, thanks to the booming price of gold, a metal around 30 times less rare than platinum.

Wilson continued: “Another indirect consequence of COVID-19 can be seen in the forecast of growth for platinum jewellery in China. Jewellery manufacturers in China recall the benefit in 2009 of their metal purchases to increase their stocks when the platinum price collapsed.

“They increased stock levels during the March pandemic-driven price fall. Producing, promoting and selling platinum jewellery locks in the value of that discount, offering better margins than gold to manufacturers and retailers.

“With platinum jewellery demand falling every year for the past seven years, the fact it is forecast to increase in 2021 is good news indeed.

“Today’s report is the 25th edition of our Platinum Quarterly and represents a milestone in our organisation’s history.

“The commitment we made in 2014 to provide actionable insights to investors has certainly been put to the test in 2020, and we look forward to providing meaningful and valued insight to all concerned for the next 25 editions and beyond.”


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