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2021 was a sad year for the entire precious metals sector, and disappointment was felt so much in platinum group metals (PGMs) as palladium performed worse.
By the end of the year, palladium is already below $ 2,000 an ounce.
Towards 2022, there is rising optimism among analysts that the value of the platinum-group precious metals will increase as the global supply chain recovers. Commodity analysts at TD Securities view the current price as an opportunity to buy.
TD Investment Bank of Canada's analysts said that palladium's average price will be $ 2,400 per ounce next year. At the same time, economists at the Bank of Canada are forecasting an average price of $ 1,188 per ounce.
Even though platinum and palladium are considered precious metals, they are used almost exclusively as industrial metals and are important components of autocatalytic converters used to reduce emissions from diesel and gasoline engines.
The UK-based precious metals research firm estimates palladium autocatalyst demand to grow by about 8% to 8.6 million ounces compared to 8.8 million ounces in 2019.
The supply of platinum and palladium will rise in 2022.
However, it should be noted that the demand is only half of the equation for the PGM market; prices also depend on the offer. Palladium is particularly sensitive as its current supply deficit narrowed due to lower demand and increased production from mines.
Most likely, the global supply of platinum will increase in 2022 as production from mines increases. In November, the World Platinum Investment Council forecast a surplus of 637,000 ounces for 2022.
Commerzbank expects the average annual price of platinum to be around $ 1,050 an ounce.
Economists assume that the platinum and palladium markets will normalize in 2022 after two years of significant supply and demand disruptions; however, some analysts said that the development of the transition to green energy is an unknown growth factor, especially for platinum.
The ability to use hydrogen to generate electricity is attracting a lot of attention as countries around the world strive to create more green energy. Platinum is an important component used to separate water into hydrogen and oxygen molecules. The hydrogen is then used to power the fuel cells.
And while the technology is still in its early stage, Bank of America analysts said it will have a significant impact on platinum demand over the next ten years.
The bank also said that a growing hydrogen economy could potentially lead to a platinum deficit by the end of 2022.
The average price of platinum is expected to be around $ 1,338 an ounce next year. This is more optimistic for platinum than palladium. At the same time, analysts estimate that the average price of palladium will be $ 2,118 an ounce by 2022. By 2023, Bank of America believes platinum will trade again at a premium compared to palladium.
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