A key uncertainty factor for the platinum group metals market in the short term is the impact of high import duties on the development of the global economy, according to an analysis by Johnson Matthey (JM).
In the US automotive industry, there is a significant risk of declining production and, consequently, demand for platinum group metals (PGMs), both for exporters of finished vehicles and for manufacturers affected by increased duties on materials and components. In addition, industrial demand may be affected by increased duties on certain finished products and chemicals made on the basis of or using platinoids.
In a negative scenario, the trade conflict will cause widespread economic damage, which will lead to a decrease in demand for MPG not only in the US automotive industry, but also abroad, as well as curb consumer spending, including on luxury goods and jewelry.
However, measures by some large economies to increase defense spending may have a positive effect on demand, and fears of disruptions in future supplies may lead to the accumulation of reserves of critical minerals (including PGMs) by consumers, investors, and even governments. This can lead to lower market liquidity and increased price volatility.
"Our forecast takes into account the deteriorating economic outlook, but nevertheless, we expect all five platinum group metals to show a balanced market or deficit this year," JM experts emphasize. However, in the near future, demand will clearly be shifted downward.
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"We expect a decrease in PGM shipments from South Africa by intermediate single digits in 2025," JM noted.
This is due to a reduction in the share of work-in-progress combined with a gradual decline in production at some mines in the western part of the complex at the Bushveld field, which are nearing the end of their service life due to their depletion. Heavy rains in February led to a temporary shutdown of mining operations at the Amandelbult mine, owned by Valterra Platinum (formerly Anglo American Platinum). Some other deposits in the region were also affected.
Experts note that some companies continue to optimize and reduce production. Supplies have already been reduced by the decision of Impala Platinum and African Rainbow Minerals to cancel the previously planned expansion of production at the Merensky Reef field at the Two Rivers joint venture and to mothball the newly commissioned processing plant, which was supposed to reach its design capacity this year.
In the first quarter of 2025, African Rainbow Minerals announced cost reductions for expansion and layoffs of workers at the facility.
