Platinum poised for strong 2026 as supply constraints offset EV headwinds
Platinum poised for strong 2026 as supply constraints offset EV headwinds
By Neils Christensen
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Updated:
(Kitco News) - Gold and silver dominated investor attention through 2025, but analysts say investors should broaden their focus in 2026 to include platinum and, potentially, palladium.
Silver was the top-performing precious metals asset last year, surging nearly 150%. Platinum followed closely, rising more than 126%, while palladium also posted strong gains, climbing roughly 80%.
Despite last year’s rally, platinum group metals (PGMs) have lagged the broader precious metals complex. Analysts expect tightening supply conditions and resilient demand to support prices through 2026.
Platinum and palladium have faced headwinds in recent years as electric vehicle (EV) adoption accelerated, reducing demand for catalytic converters. Roughly 80% of PGM demand comes from the automotive sector, where the metals are used to reduce harmful emissions in internal combustion engines (ICE).
However, sentiment has begun to shift as expectations for EV growth have been modestly downgraded. Analysts at TD Securities expect demand for ICE vehicles to remain strong in the U.S., providing ongoing support for PGM demand.
Automotive demand remains a critical pillar for platinum, but it is not the only source of consumption. Platinum also plays an important role in glass manufacturing and electronics. While demand is expected to remain robust in 2026, analysts question whether supply will be able to keep pace.
In November, the World Platinum Investment Council (WPIC) said the platinum market could move toward balance after three consecutive years of supply deficits. Still, depleted above-ground stocks are expected to keep the physical market tight, pushing premiums higher.
WPIC data shows global platinum stockpiles currently cover just five months of demand. With fundamentals nearing balance, inventories are unlikely to rebuild meaningfully.
Limited supplies are also raising concerns about strategic competition for critical materials. Pressure intensified after the U.S. Geological Survey classified platinum and palladium as critical metals in November.
“As the world inches towards a war-time economy, incentives for stockpiling of critical minerals will remain with the associated Section 232 investigation potentially keeping the threat of tariffs alive with a delayed implementation date,” said commodity analysts at TDS. “This, along with a rise in prevalence for just-in-case inventory systems functioning, will continue to incentivize outsized stockpiling. These will keep global inventory pools from repleting, fueling extreme tightness in London.”
Analysts broadly agree that structural supply constraints remain a long-term issue.
“A decade of underinvestment keeps long-term output capped,” said Nicky Shiels, head of research and metals strategy at MKS PAMP, adding that she is bullish on platinum heading into 2026.
“Persistent structural deficits mean prices should grind higher, with upside asymmetry if investment demand strengthens or policy risks bite,” she said.
Shiels sees platinum prices reaching $2,000 an ounce in 2026. TD Securities expects prices to average around $1,800 an ounce in the second half of the year, keeping the $2,000 level in play.
However, WPIC warned that a key risk for 2026 would be the absence of U.S. tariffs on PGMs, which could push platinum and palladium out of the U.S. market and drive higher premiums in over-the-counter physical markets.
“CME-warehoused platinum stocks have increased by ~350 koz year-to-date and assuming no trade barriers arise, are expected to unwind back to levels similar to the beginning of 2025 by the end of 2026,” WPIC said. “If year-to-date exchange stock inflows stay at current levels, the 2025 deficit increases from 692 koz to 891 koz. If they unwind, it reduces to 542 koz. If they persist into 2026, the market would be in a 329 koz deficit; if they unwind, the surplus increases to 219 koz.”
Not all analysts share the same level of optimism.
BMO Capital Markets expects platinum prices to average around $1,375 an ounce in 2026, while palladium prices are forecast to average roughly $1,150 an ounce. The bank remains more constructive on gold and silver.
“Should these metals find themselves in surplus, then industrial consumers will no longer need to rely on the sale of investor volume to access the units they need, reducing demand pressure from the spot market. Palladium’s fundamentals are even worse, with the metal projected to remain in a sizeable surplus from next year onwards,” BMO said.
Commerzbank analysts also expect platinum prices to remain well supported but see limited upside as market tightness eases and gold’s momentum moderates. The German bank forecasts platinum prices to average around $1,800 an ounce in the second half of the year.
Read the full article at: Platinum poised for strong 2026 as supply constraints offset EV headwinds | Kitco News