The price of platinum has soared as high demand meets low supply.
Tomohiro Ohsumi | Bloomberg | Getty Images
Platinum posted its best quarter since 2008, as China has scooped up vast stocks of the precious metal.
Platinum rose almost 2% on Friday to $1,086 per troy ounce, up more than 26% from the start of the quarter.
That move marks the biggest quarterly increase since the first quarter of 2008, when platinum gained a staggering 33.96%.
Platinum is used in the defense and aerospace industries, especially in jet and rocket engines. It also is used in processes for making detergents, fertilizers, plastics and explosives.
China has imported excessive amounts of platinum since 2019, according to the World Platinum Investment Council, which has left a limited above-ground supply for the rest of the world.
“This, in combination with higher prices likely being needed to release Chinese inventories to the domestic market, could have a significant bearing” on the price of platinum, according to the Council’s Platinum Perspectives report in December.
The Council anticipates a platinum deficit in 2023, with demand growing by 19% while supply increasing by just 2%. Despite international economic turbulence, with many countries already in, or expected to tip into, recession, industrial demand for platinum will be up 10% compared to 2022, which exceeds the 10-year average, according to a press release by the WPIC.
Demand for platinum in the automotive industry will also continue to grow next year, while jewelry-based demand for platinum is forecasted to remain constant throughout 2023.
Platinum gained more than 13% in 2022, outpacing other precious metals including gold, silver and palladium.
A knock-on effect
The platinum market posted a deficit in 2020 after the onset of the coronavirus pandemic brought industry to a standstill. The market saw a period of recovery in February 2021 when the metal touched a six-year high as industrial demand improved and investors weighed up platinum’s importance in the global transition to clean energy.
—CNBC’s Alex Harring and Gina Francolla contributed to this report.