There is likely to be a platinum deficit for the third consecutive year, according to latest estimates by the World Platinum Investment Council (WPIC) even as demand is set to surge on the back of rapid economic recovery worldwide. The commodity finds several uses within industries and is an important addition in the form of jewelry and investment as well.

Through the current year, there could be a deficit of around 158k ounces in platinum supply, as per estimates mentioned in the WPIC’s most recent report, published every quarter. The figure has been revised higher from the previous quarter’s undersupply forecast of 60k ounces for 2021.

This comes after an 836k undersupply through the past year when the coronavirus pandemic drove demand down severely, among both industry as well as jewelers. However, the WPIC appears optimistic that demand could rebound to beyond pre-pandemic levels in 2021, rising above the demand seen during 2019, especially among industries. On the other hand, platinum demand among jewelers is expected to remain depressed this year as well.

In 2020, the precious metal had fallen to $558 per ounce, the lowest levels seen since 18 years, driven lower by the severe contraction in demand. While it has recovered since then – trading at $1,233, at the time of writing, it is nowhere close to the highest levels it traded at around one decade ago.

Despite the current weak demand owing to the ongoing crisis, platinum is expected to see a surge in demand in the coming years, especially with the increased focus on climate change driving the need for clean energy. Platinum is a key component required in the hydrogen industry while automobile makers are also expected to opt for it over the costlier alternative – palladium, for use in catalytic converters.