Platinum demand is set to fall by 7.2% globally this year, on the back of lower demand from the automotive and jewellery sector.

Typically, these sectors account for 34% and 24% of total demand, respectively, but Covid-19 had dampened the sector’s operations and their own demand, says data and analytics company GlobalData.

Particularly, China and Japan are the two biggest platinum-consuming nations and together account for 35% of platinum demand, says senior mining analyst Ankita Awasthi.

Demand from these countries is expected to fall by 9.2% and 11.8%, respectively, this year.

In China alone, GlobalData reports that its metal demand for jewellery, industrial, automotive and other uses is likely to contract by 14%, 4.6% and 3.9%, respectively.

This while metal demand from these segments in Japan will decline by 14% for autocatalysts, 12.1% for jewellery and 7.5% for industrial uses.

Despite the pandemic impacting on demand for platinum from the automotive sector, demand will still recover over coming years as stricter emission standards are implemented, says the company.

GlobalData says China has the world’s largest automobile industry and consumes 7.1% of the metal for autocatalysts. With the country having to shut down its industrial belts during its lockdown, the country recorded a 79% year-on-year fall in automotive sales in February and a 43% fall in March.

However, sales subsequently grew by 4.4% year-on-year in April, 14.5% in May and 11.6% in June, compared with the sales of these months last year.

Over 2020 to 2024, platinum demand from the automobile industry is expected to grow by a compound annual growth rate (CAGR) of 3.8% globally and by 9.5% in China alone.

Accordingly, global platinum demand will increase by a CAGR of 4.3% over this period, while platinum demand in China and Japan will grow at CAGRs of 5.2% and 2.4%, respectively, over the forecast period.