A balanced platinum market in 2026 won’t fix fundamental long-term issues - WPIC
A balanced platinum market in 2026 won’t fix fundamental long-term issues - WPIC
By Neils Christensen
Published:
Updated:
(Kitco News) - Unprecedented market conditions during the third quarter helped drive platinum prices to their highest level in nearly 15 years. And as prices could continue to consolidate at elevated levels in the near term, the market remains well supported through 2026, according to the latest report from the World Platinum Investment Council (WPIC).
In its quarterly market report published on Tuesday, the council said that platinum will remain sensitive to global trade uncertainty. While the market is slowly moving back into balance, conditions are expected to remain tight through the new year.
In its updated projections, the WPIC expects the platinum market to see a supply deficit of 692,000 ounces this year, down slightly from the second-quarter estimate for a deficit of around 850,000 ounces.
In their first look at 2026, analysts expect the platinum market to balance with a small 20,000-ounce surplus.
In an interview with Kitco News, Edward Sterck, Director of Research at the WPIC, said next year’s surplus will depend on a normalization of global trade. He added that if there is a resolution to the global trade war, he expects 150,000 ounces to flow out of vaults in the U.S. into physical markets in London.
Similar to what has happened to silver, the platinum market has seen significant supply chain disruptions as bullion banks and market participants have shifted tonnes of metal to America to avoid potential import tariffs. Although platinum is not tariffed as a precious metal, the threat of import fees has not gone away, as it has been officially added to the U.S. Geological Survey (USGS) 2025 List of Critical Minerals. Because of tariff threats, most of the metal that flowed into the U.S. at the start of the year has stayed there, putting pressure on London’s over-the-counter market as investment demand has picked up.
Looking beyond global trade tensions, the report noted that a potential shift in investment demand and profit-taking, leading to outflows in platinum-backed exchange-traded funds, is another factor that will contribute to next year’s balanced market.
“Total platinum demand will decrease by 6% year-on-year largely due to an approximate halving of investment demand – a reduction dependent upon an easing of tariff fears, allowing an outflow from stocks held on exchange, and a higher platinum price prompting ETF profit taking,” the report said.
Although normalizing global trading conditions could ease some supply chain issues and support a balanced market, Sterck said that the sector continues to face ongoing fundamental uncertainty as supply struggles and demand remain robust.
“While the significant moves in ETF holdings and exchange stocks are expected to push platinum towards more balanced market conditions, the sustained elevated lease rates and strong backwardation highlight that balancing flows from above-ground stocks to fill the 2025 deficit have been insufficient to ease tight market conditions,” the report said.
“Thus, it seems probable that a substantial market surplus would be needed to alleviate market tightness going into 2026. Ultimately, the slow responsiveness of supply and demand to substantially higher prices supports the entrenched nature of tight platinum markets, which continues to bode well for platinum’s attractive investment case.”
With 2025 quickly coming to a close, the WPIC expects mine supply this year to fall by 5% year-on-year to 5,510 koz. Mine production this year is expected to be 10% below the five-year pre-COVID average.
At the same time, trade uncertainty has impacted platinum recycling, but the sector still saw significant growth, with scrap supply increasing 8% from last year.
“In full year 2025, recycling supply is projected to increase 7% year-on-year (+103 koz) to 1,619 koz, as the increase in the platinum-group-metal (PGM) basket price supports both the flow of spent autocatalyst material and higher jewellery recycling, especially in China,” the analysts said.
Looking to next year, the council sees the platinum supply growing as recycling continues to pick up momentum.
“In 2026, total supply is forecast to grow 4% to 7,404 koz, predominantly on the back of strengthening recycling supply,” the report said.
Sterck noted that even at higher prices, mine supply remains fairly constrained. He added that it will take time for new mine production to come online.
Platinum demand this year is being driven by surging investment demand. The report said that total investment demand is forecast to grow 6% to 742 koz.
“Platinum ETF holdings are forecast to rise by 70 koz, driven by improved sentiment following the recent price breakout, robust underlying fundamentals, and platinum’s sustained discount to gold. Net outflows in exchange stocks based on improving tariff-related sentiment are anticipated between the end of Q3 and the year-end, resulting in net inflows reducing to 150 koz for full year 2025,” the report said. “In 2026, investment demand is forecast to reduce by 52% to 358 koz, on the assumption that tariff-related uncertainty recedes and inventories normalize, leading to a 150 koz outflow from exchange stocks.”
Industrial demand is expected to see a significant decline this year.
“Industrial demand is forecast to fall by 22% year-on-year in full year 2025 to 1,902 koz, largely due to an anticipated cyclical reduction in glass demand from record levels in 2024,” the report said.
Meanwhile, automotive demand is expected to fall by 3% to 3,020 koz as demand for catalyzed vehicles declines in both light- and heavy-duty segments.
“Nevertheless, automotive demand will be 10% above the prior five-year average,” the report said.
Finally, platinum jewellery demand is projected to rise 7% year-on-year to 2,157 koz, the highest level since 2018.
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