Page 10 - Bullion World Issue 9 January 2022

Bullion World | Issue 09 | January 2022

semiconductor shortage could CHART 1: ALTHOUGH ALL FOUR METALS ARE DOWN IN 2021,
persist into 2023 have circulated GOLD AND SILVER ARE TRADING ABOVE
for the past few months, forecasts PRE-PANDEMIC LEVELS
by auto data providers have started
to factor in much larger losses for Note: Indexed at January 2020. Source: Standard Chartered
2021 and 2022. The Manheim US
used vehicle value index continues Research, Bloomberg
to scale record highs (since the
database began in 1995), while US
auto inventory has plummeted to a
fresh record low (database began
in 1960). China’s auto inventory has
fallen to its lowest since December
2017.

Auto production forecasters have
lowered their 2021 estimates by
5.2-7.7mn units. For platinum,
this takes lost demand to around
175-275koz for the full year; for
palladium, it could be up to 800koz;
and for rhodium up to 100koz. Our
balances had already assumed
some lost production due to chip CHART 2: GOLD AND PLATINUM ETF HOLDINGS ARE DOWN
shortages, but the latest demand FOR THE YEAR
estimates tilted our platinum market
balances into surplus for 2021 Note: Indexed at January 2021. Source: Standard Chartered
and reduced the palladium deficit. Research, various ETF websites, Bloomberg
In 2022, we expect the palladium
market to remain undersupplied
but to a smaller extent and forecast
a smaller platinum surplus y/y.
We expect considerable pent-up
demand to materialise as supply
chains recover. This should drive
upward momentum in the PGMs in
H2-2022.

Ms Suki is the Bank’s Precious Metals Analyst, based in New York. She covers
the markets for gold, silver, platinum, palladium and other platinum-group
metals, along with the key producing countries and consuming sectors. She
joined Standard Chartered in 2015 from Barclays, where she spent 11 years,
most recently as Head of Metals Research. Previously, she was a Chartered
Accountant at PriceWaterhouseCoopers. Suki is a member of the Public Affairs
Committee of the London Bullion Market Association (LBMA). She is an ACA
Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW).

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