Platinum price has risen by more than 65% since the beginning of the year as it was trading around $1,560 per ounce by early December. Despite the structural shortage, the market was very conservative in its outlook for platinum price growth, with the LBMA consensus forecast seeing an average price of $1,022 per ounce this year.
This cautious forecast was based on the assumption that supply would grow faster than demand, and interest from investors would be moderate. However, the market faced a severe shortage amid stable demand and declining supply, while demand from investors surged amid a shift away from dollar-denominated assets and the risk of imposing the US import duties on platinum group metals. “A surge in metal imports by jewelers in China, as well as investors and consumers in the USA - amid insufficient supply on the spot market - resulted in a significant price growth,” Norilsk Nickel said in its report.
At the same time, the major industry company expects the market to normalize by 2026, and the deficit will be less severe. According to the World Platinum Investment Council (WPIC), the drivers of the market balance are a reversal in investment demand and profit-taking reflected in the outflow from platinum-backed exchange-traded funds (ETFs).
Inevitable profit-taking
After three years of significant deficit, the platinum market will be close to balance in 2026, according to the World Platinum Investment Council. A small surplus is estimated at 20,000 ounces.
This change is largely due to rising prices, which is triggering profit-taking among platinum ETF holders, as well as due to the expected outflow from CMEs’ warehouses in the USA. Another factor favoring the balanced fundamentals is the supply stimulus provided by the increased platinum recycling.
The WPIC’s forecast is quite conservative, says Ed Sterk, Head of Research at the organization’s board. He estimates that if trade tension persists and ETF holders continue to hold on to their assets, the platinum market will see a deficit of 300,000 ounces in 2026.
The supply and demand gap estimate in 2025 was revised for the third time in November. The deficit is now estimated at 692,000 ounces, according to the latest Platinum Quarterly report. In September of this year, the WPIC estimated the deficit at 850,000 ounces, and in May, it was at 966,000 ounces.
The supply forecast was revised upward by 102,000 ounces due to a faster-than-expected recovery in platinum production in South Africa after a sluggish first quarter of 2025, while the downward revision of demand by 56,000 ounces primarily reflects weakening Indian jewelry exports due to the imposition of the US tariffs.
The platinum market has been in deficit since 2023. Last year, demand exceeded supply by 968,000 ounces.
Platinum Market Supply-Demand Balances, 2014 to 2026
Source: World Platinum Investment Council, Platinum Quarterly 3Q 2025
New WPIC forecasts suggest that the overall platinum demand would decline by 5% to 7.821 mn ounces in 2025. The main factor is the weak industrial demand, expected to fall by 22% to 2.07 mn ounces primarily due to a cyclical decline in the consumption in glass making industry after record highs in 2024, although a recovery is expected next year, according to WPIC.
Consumption in the automotive industry will decline by 3% to 3.02 mn ounces due to a falling demand for autocatalysts in both the passenger car and truck segments. Although adoption of electric vehicles has been slower than expected, the WPIC believes that powertrain development will inevitably shift toward electrification. Nevertheless, demand in this key platinum sector remains 10% above the previous five-year average.
Demand for jewelry, on the other hand, is expected to grow by 7% to 2.157 mn ounces - the highest level since 2018 - as platinum jewelry continues to displace gold jewelry due to its relatively low price. "High gold prices are driving consumers to seek cheaper alternatives, and platinum meets these needs now," says Sterk.
Investment demand will grow by 6% this year, to 742,000 ounces. The main driver of this growth will be purchases of platinum bars and coins that will increase by 73% year-on-year to 336,000 ounces. Platinum ETF stocks will increase by 100,000 ounces over the year, to 150,000 ounces. Inflows into platinum ETFs will total 70,000 ounces.
Nornickel’s forecasts
Nornickel is more conservative in its estimate of the market deficit in 2025: the Russian company believes that demand will exceed supply by 300,000 ounces, taking into account the investment demand of approximately 200,000 ounces.
Industrial consumption of platinum (excluding investment demand) will be slightly lower (by 1%) this year, 7.1 mn ounces. Platinum consumption in the automotive industry is declining amid declining production of diesel vehicles that are being replaced by gasoline hybrids; as well as amid the replacement by palladium and a general decline in autocatalyst loadings in certain markets. However, this trend will be offset by increased consumption by China’s jewelers amid record gold prices, as well as in other industrial sectors, the Russian company believes.
Meanwhile, supply (excluding inventories) will decline by 2% in 2025, to 7.1 mn ounces, including the decline in primary platinum supply by 3% to 5.5 mn ounces driven by expected platinum production cuts in South Africa and North America caused by technical challenges and cost-cutting measures. Recycling volumes will increase by 3% to 1.5 mn ounces, recovering from the 2020-2023 decline and amid the extension of the trade-in program in China.
Due to ongoing supply risks, primarily from South Africa and secondary sources, Nornickel expects the deficit to persist into 2026, widening to approximately 500,000 ounces.
Is production constrained?
Total platinum supply will decline by 2% in 2025 to 7.129 mn ounces, according to a WPIC report. Primary platinum production will decline by 5% to 5.51 mn ounces, down 10% compared to the five-year pre-pandemic average. The decline is attributed to heavy rainfall in South Africa in the first quarter of 2025, as well as strong figures in 2024, when producers have processed previously accumulated work-in-progress inventories. According to RMB Morgan Stanley, South African platinum group metal (PGM) production over the next five years will be 5.5% below the 2024 level of approximately 5.8 mn ounces.
Higher prices will drive recycling growth by 7% (or 103,000 ounces) to 1.62 mn ounces, but this is not enough to offset the decline in platinum production, according to the WPIC.
Despite rising prices, the industry body is very cautious about the potential for platinum production growth in South Africa, explaining this by the inflexible nature of the main mines that limits the ability to quickly adjust platinum production volumes.
Rising platinum prices could create ‘some reserve’ for additional mine life extensions and the resumption of platinum production at some projects in South Africa, such as Impala Platinum’s Two Rivers Merensky mine, according to RMB Morgan Stanley. However, the bank believes that such projects “only likely to partially offset some of the expected depletion in existing mines.”
According to Craig Miller, CEO of Valterra Platinum, underinvestment and the limited lifespan of existing mines will reduce primary supply “by 15% to 20%” by the end of this decade. “You’d need to see the PGM basket price increase by another 50% from where we are now and for it to be maintained at that level to incentivize new greenfield production coming online and earning a sort of a 10% return,” Miller said.
“Primary supply is constrained and secondary supply is just not coming to the market because the cost of recycling is still too expensive,” Miller stated. This will result in an increased platinum shortage, while demand from automakers remains strong thanks to rising sales of both conventional and hybrid vehicles. The transition to alternative energy sources is more slowly than expected, says the head of a former Anglo American’s subsidiary.
Meanwhile, according to Heraeus Precious Metals, a division of the German technology group Heraeus, the effects of this favorable market environment are already felt. Higher prices for PGMs are contributing to higher profitability and increased capital to support business and growth. With the investment landscape changing after several years of austerity, the projects previously delayed such as the restart of the Bokoni and the Two Rivers Merensky mines, both located in the eastern Bushveld, may also be reconsidered and resumed if prices for PGMs remain high. Assuming no delays in the launch of new mines and their restarts, platinum production in South Africa is expected to recover to 3.7 mn ounces in 2026, according to Heraeus’ November report.
Heraeus cites projects in South Africa that have already benefited from rising prices. For example, Eastplats, developing the deposits on the western slope of the Bushveld, received a C$1 mn loan to support the expansion of its reopened Crocodile River mine, while the Wesizwe company continues to develop its Bakubung project. Ivanplats’ Platreef mine located in the northern Bushveld complex, has opened its first phase, producing approximately 35,000 ounces of PGMs. The company expects funding for the construction of the second phase - aimed at increasing ore production by more than four times from the initial 0.8 mn tons per year to be received in early 2026, and it will be followed by the construction scheduled to start in late 2027.
Persistent platinum shortage in the spot market
While the global platinum supply and demand balance is normalizing, the spot market remains in short supply, as evidenced by persistently high metal rental rates. According to the WPIC, platinum rental rates rose by an average of 15% in the third quarter, up from 1% in 2024. This surge indicates a shortage of the metal, driven by a market deficit due to global trade uncertainty.
Significant disruptions in the platinum supply chain, similar to those experienced with silver, arose because bullion banks and market participants were moving tons of the metal to the USA to avoid potential import tariffs. Although platinum is not subject to tariffs as a precious metal, the threat of imposing the import tariffs remains. Due to the tariff threat, much of the metal arrived in the USA earlier this year remained in the country, putting pressure on the London over-the-counter market amid rising investment demand.
If the global trade war is resolved, 150,000 ounces from the US vaults are expected to enter physical markets in London, Sterk of WPIC told Kitco News.
Normalization of global trade conditions may ease some supply chain issues, but the industry still faces fundamental uncertainty as supply is strained and demand remains high, Sterk said.
“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 states.
WPIC’s and Metals Focus’ forecasts for 2026
WPIC estimates that platinum supply will grow by 4% in 2026 to 7.4 mn ounces, including a 2% increase in mining production to 5.62 mn ounces due to the processing of some work-in-progress. Recycling will grow by 10% to 1.78 mn ounces, as higher prices stimulate the recycling of spent autocatalysts and jewelry scrap.
In 2026, global platinum demand will decline by 6% to 7.385 mn ounces. Investment demand will plummet (by 52%) to 358,000 ounces: in addition to profit-taking by ETF holders - with the outflows estimated at 170,000 ounces, - an outflow from ETF stocks is expected amid easing trade tensions in the USA.
The declining investment demand is the most important factor in shaping the market balance in 2026: of the overall decline in absolute platinum demand of 437,000 ounces in 2026, approximately 385,000 ounces will be from investors, the WPIC notes.
The projected 37% growth in coin and bar demand (to 462,000 ounces) will not change the overall picture of weakening investment demand.
Finally, demand for platinum jewelry is expected to grow 7% year-on-year to 2.157 mn ounces, which is the highest level since 2018.
The WPIC believes that increased mining and recycling will not be enough to ease the tension caused by metal availability constraints. “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 support the entrenched nature of tight platinum markets which continues to bode well for platinum’s attractive investment case,” the report states.
The inflation-adjusted price of platinum remains approximately $800 per ounce below its all-time high, WPIC notes.
According to Metals Focus, the platinum supply deficit in 2026 will be 460,000 ounces, with demand in China growing by 1%, driven by growing consumption for the glass making and chemical production industries.
Analysts see no significant upside trend again
A Reuters survey of 30 analysts and traders conducted in late October found that the market expects the average platinum price in 2026 to be around $1,550 per ounce. This is significantly higher than the previous survey’s result of $1,272 per ounce published in July, but does not imply a significant increase from current levels (the average price in November 2025 is around $1,570 per ounce) and is significantly below this year’s all-time high of over $1,700.
The main factors for platinum include the possible launch of a platinum futures contract in China, still sluggish demand for jewelry (after China’s manufacturers built up their platinum inventories), and the outflow from platinum exchange-traded funds (ETFs), which helps ease spot market tensions during periods of profit-taking, explains Suki Cooper of Standard Chartered. At the same time, she told Reuters “We continue to expect platinum prices to test higher highs and remain deeply undersupplied in 2026.”
UBS is also conservative in its outlook for platinum price growth in 2026, with its updated forecast for an average price of $1,550 per ounce.
Metal Focus forecasts an average platinum price of $1,670 per ounce in 2026. “For 2026, its platinum that will continue to ride gold’s rally and provide investors with plenty of upside based on its strong fundamentals,” said Melissa Pistilli, senior precious metals specialist at INN.
World Bank economists believe that limited supply and gradually increasing demand are indicative of further price gains for platinum. They estimate that platinum prices will rise by approximately 4% in 2026.
In its report, the World Bank notes that demand for platinum may be subdued, as the automotive industry accounting for approximately 40% of total demand, is slowing as electric vehicles gain ground. However, even despite this and some recovery from recent platinum production lows in South Africa, “supply is still expected to fall short of demand, keeping market conditions,” World Bank’s experts believe.
Sergey Bondarenko for Rough&Polished
