Platinum market seen swinging to surplus on investor selling
Platinum market seen swinging to surplus on investor selling
Jack Ryan / Bloomberg • • 2 min read
(Sept 9): The platinum market is set to swing into surplus this year after three years of shortfalls amid heavy investor selling and weaker Chinese jewellery demand, according to the World Platinum Investment Council.
Precious metals were swept up in an investment frenzy early this year, with platinum surging to a record near US$3,000 an ounce as Chinese investors piled into new contracts traded on the Guangzhou Futures Exchange. That rush then reversed sharply and platinum is down by more than a third from its January peak.
The WPIC now predicts an 8.2-tonne surplus in 2026, compared with a 9.2-tonne deficit forecast earlier this year. The change is almost entirely due to a cut to investment demand, with ETF holdings expected to fall by about 12 tonnes this year.
Chinese platinum jewellery demand also slumped, with second-quarter fabrication down 76% from a year earlier, according to consultant Metals Focus, which gathered the data on behalf of the WPIC.
The market is forecast to be in deficit in the second half as investor demand picks up again, said Ed Sterck, director of research at the WPIC, although that won’t be enough to make up for the “large ETF outflows earlier in the year".
Roughly 40% of platinum demand comes from makers of catalytic converters, which filter harmful emissions from internal combustion engine vehicles. The global rollout of electric cars, which do not need autocatalysts, has weighed on the metal’s long-term outlook.
Still, other forms of industrial consumption remain a relative bright spot, the WPIC said, helped by data centre growth and advanced electronics. The mined platinum supply has also continued to drift lower in recent years, with ageing mines and operational issues affecting producers in South Africa and Russia.