The supply and demand trajectories for platinum have been stable for quite a long time. Demand for platinum remains relatively stable, as declining consumption in internal combustion engine (ICE) vehicles is offset by growing demand from various industrial applications and the jewelry sector, as well as by investors’ appetite for the metal. Platinum supply is slowly declining (global supply has fallen by 9 percent since 2016, according to Metals Focus) as the metal mining in South Africa was not sufficiently financed during a period of low prices - it faced persistent operational challenges and resource depletion, while recycling has regularly stayed below expectations.
The result is a deficit that led to a 127-percent increase in the platinum price in 2025 amid rising gold prices - one of the drivers of renewed investment and industrial demand for platinum group metals (PGMs) - and trade disruptions caused by the looming U.S. tariffs hike. This shortage is becoming increasingly real, and not just on paper, as is confirmed by higher lease rates that indicate strong industrial demand for platinum and limited spot market availability.
While high prices for platinum should stimulate a supply response, recycling will once again face obstacles, including those caused by the war in the Middle East, warns the World Platinum Investment Council (WPIC). The war is also affecting the production costs in the mining industry. The refusal of a significant number of industrial consumers to lease, with rates remaining in the double digits, is expected to reduce market liquidity and maintain tight availability of the metal. In 2026, these market conditions could contribute to platinum’s continued role as ‘industrial gold’, even if fundamental factors remain unchanged.
WPIC forecast
The WPIC expects a platinum deficit of 240,000 ounces in 2026, instead of a previously forecast balanced market, according to the WPIC’s Platinum Quarterly report published in March. While profit-taking was previously expected, the WPIC now notes that investors are maintaining stable ETFs amid concerns about trade relations.
In 2025, the platinum market recorded its third consecutive deficit at 1.082 mn ounces, the largest since the WPIC began collecting data in 2013. The deficit was driven by a decline in available stocks to unacceptably low levels and an unstable geopolitical environment that led to favorable investor sentiment for all precious metals, the WPIC notes. The price of platinum more than doubled under these conditions.
Total platinum supply in 2025 declined by 1 percent to 7.215 mn ounces. A 4-percent decline in mining was partially offset by a 10-percent increase in recycling. Total platinum demand increased by 1 percent to 8.297 mn ounces in 2025. Investment demand for platinum grew by 65 percent, while jewelry demand was up 9 percent to its best level since 2018. This growth more than offset the cyclical decline in demand from the industrial sector.
Platinum demand in 2025:
In 2026, the WPIC forecasts a 2-percent increase in total platinum supply. The supply from mines is expected to remain stable. Recycling will be up 10 percent year-on-year, as higher prices stimulate the recycling of used auto catalysts and the increase in sales of jewelry scrap.
Total platinum demand is expected to decline by 8 percent to 7.619 mn ounces in 2026, as a robust growth in ETFs in 2025 will not be repeated this year, according to the WPIC.
The WPIC demand forecast:
Specifically, demand from the automotive sector is expected to decline by 2 percent in 2026, jewelry demand by 9 percent, but industrial demand will grow by 11 percent. The decisive factor will be the outflow of investment demand of 531,000 ounces, according to the WPIC.
Producers’ forecasts
According to Norilsk Nickel, the platinum market is expected to remain in deficit in 2026, which will amount to approximately 300 mn ounces, as in the previous year, with the potential to increase to 400 mn ounces if the current upward trend in investment demand continues.
Platinum market balance: The medium-term market deficit, mn troy ounces
Source: Nornickel’s 2025 IFRS financial results presentation
баланс - balance. Blue-white - Market balance which accounts for investment demand and inventories. Blue - Market balance without taking investment demand and inventories into account.
Nornickel estimates that platinum consumption by an industrial sector (excluding investment demand) will be relatively stable in 2026 at 7.4 mn ounces (up 1 percent). Declining consumption in the automotive industry - amid the lower diesel vehicle production and the substitution of platinum with palladium as a cheaper alternative - will be offset by increased consumption in other industrial sectors, such as electronics and chemicals, Nornickel analysts believe.
At the same time, supply (excluding inventories) will also increase by 1 percent to 7.1 mn ounces in 2026. Primary platinum supply will remain at the 2025 level, as South Africa’s capacity to increase production is limited, while other regions will see production declines. At the same time, recycling volumes will increase by 6 percent to 1.6 mn ounces, as scrap collection will intensify amid higher prices, and the precious metal content of recyclable catalysts increases.
Sibanye-Stillwater expects the platinum market to remain in significant deficit of at least 600,000 ounces until at least 2034, and the company’s forecasts are more extreme than the market consensus.
Long-term platinum market balance - market consensus (gray) and Sibanye-Stillwater’s forecast:
Source: Sibanye-Stillwater, April 20, 2026, Capital Markets Presentation
Global platinum supply is structurally decreasing, the company explains. Metal production will decline by an average of 1.8 percent per year from 2019 to 2034, with deficit reaching 900,000 ounces within 10 years from 2024. This is due to underinvestment in the industry amid low prices, restrictions on operations in South Africa (water, electricity, etc.), and inflation. The conflict in Ukraine affects the potential and pace of expansion projects in Russia, Sibanye-Stillwater notes.
Platinum production by region to 2034:
Taking recycling into account, the average annual decline in total platinum production is estimated at 1.5 percent until 2034.
Platinum supply including recycling to 2034:
The recovery of secondary production is very slow: from 2024 to 2034, the annual growth in recycling rates is estimated at 250,000 ounces of platinum, according to Sibanye-Stillwater.
In the long term, new industrial applications will be needed to offset the decline in demand for autocatalysts, the company notes. Sibanye-Stillwater, for example, highlights Heraeus’s ongoing program to replace platinum with palladium in fiberglass bushings.
Valterra Platinum expects the platinum market to remain in significant deficit (at least 450,000 ounces) in 2026 and 2027, in contrast to palladium and rhodium that are moving to balance.
Source: Valterra Platinum Annual Results 2025 presentation
While mine production will decline in the long term, albeit at a slower pace, auto sales continue to grow amid an expanding global economy, and industrial demand is supported by new technologies such as AI, the company notes in its presentation.
Valterra Platinum’s PGM basket is expected to grow by 86 percent in 2025, and the company believes the upside will remain amid the slower battery electric vehicle (BEV) adoption and a persistent discount to gold:
Impala Platinum (Implats) estimates a platinum deficit at 600,000 ounces in 2026. Demand for the metal will fall by 5 percent year-on-year to 7.7 mn ounces amid a declined consumption in automotive industry due to the continued focus on electric vehicles and a consolidation in the jewelry sector after a strong growth in 2025. Industrial demand remains growing and diversified. However, investment demand could tighten the availability of the metal. Implats believes the supplies of platinum will remain at last year’s level of around 7.1 mn ounces. Mining output is recovering from last year’s accelerated decrease in stocks, although a weak portfolio of projects results in reduced primary supply. Secondary production will grow moderately, experiencing ongoing challenges.
Source: Implats interim results 2026 presentation
Northam Platinum estimates the deficit at 900,000 ounces in 2026: supply will be 6.7 mn ounces (including primary platinum production of 5.2 mn ounces), and demand will be 7.6 mn ounces (including the demand of 3.5 mn ounces from the automotive industry, 2.6 mn ounces from the industrial sector, and 1.5 mn ounces from the jewelry industry).
Source: Northam Platinum Interim results for the 6 months ended 31 December 2025
The six-monthly average 4E basket price in rands was already close to its highest level in 11 years by the end of last year, and the spot price is already significantly higher, according to the Northam presentation.
Q1 results
Despite the producers’ consensus that the deficit will persist for longer, the operating performance of a majority of companies in the most recent reporting period was largely positive. This is explained by a weak first quarter of 2025, when mining output in South Africa fell due to floods and other operational challenges.
- Valterra Platinum increased refined metal production in the first quarter of 2026 (including the processing of concentrate purchased from third-party producers at its own facilities) by 78 percent to 778,500 ounces. Its own PGMs production increased by 5 percent year-on-year to 486,200 ounces. The overall increase was driven by improved operating performance of raw material sellers, performance at its Amandelbult mine flooded in February 2025, as well as changing the time of scheduled maintenance. Sales for the first quarter increased by 60 percent to 791,400 ounces. The 2026 refined metal production forecast was confirmed at 3 mn-3.4 mn ounces.
- Implats saw a slight 0.5-percent decrease in its 6E PGM concentrate production for the quarter ended March 31, 2026, to 762,000 ounces, including a 2.6-percent decrease in its own production to 588,000 ounces. Refined 6E concentrate production increased by 19 percent to 851,000 ounces. Sales increased by 9 percent to 847,000 ounces. At the end of the period, the company had the unsold inventories of 320,000 ounces. Implats confirmed its 2026 production forecast of 3.4 mn–3.6 mn ounces of refined 6E concentrate.
- Nornickel decreased platinum production in the first quarter by 24 percent year-on-year to 136,000 ounces, and palladium production by 18 percent year-on-year (608,000 ounces), which is explained by the mining cycle of disseminated ores (with lower metal content), a high base, and the redistribution of metal output between quarters. Nornickel confirmed its full-year forecast for platinum of 616,000-636,000 ounces and palladium of 2.415 mn-2.465 mn ounces, respectively, which is below the 2025 total.
- Sibanye-Stillwater’s plan is to produce 1.65 mn-1.75 mn ounces of platinum group metals (4E) in South Africa in 2026, and another 280,000-300,000 ounces of platinum and palladium at its U.S. facilities.
- Northam Platinum’s plan is to produce 910,000–930,000 ounces of platinum equivalent in its 2026 fiscal year ending June 30, 2025, with PGM (4E) sales expected to be at least 1.07 mn ounces.
Lease rates are changing the market
A significant part of the demand for platinum comes from industrial applications, as well as from automotive and jewelry sectors, where the metal can be stored for longer periods, regardless of whether it is leased or purchased. As lease costs have risen sharply since the end of 2024 due to concerns about the U.S. import tariffs amid a tight market, some end users have reconsidered their ways of access to platinum and preferred ownership over leasing, according to the WPIC study. This shift in behavior began in May 2025 - amid already depleted above-ground metal stocks - coinciding with the onset of the platinum market rally, which resulted in platinum prices rising by 127 percent by the end of last year and continuing to rise in 2026.
Correlation between lease market liquidity and the platinum price, pivot to ownership:
Source: WPIC Platinum Essentials March 2026 (Leasing vs Owning)
Leasing volumes have fallen by approximately 60 percent since the beginning of 2025, despite the demand from end-users remaining mainly unchanged. This was driven by financial factors, as leasing platinum became unprofitable at current rates, while owning offered a more predictable supply of metal. During this period, lease rates have increased sixfold.
The choice between leasing and owning affects the availability of above ground metal stocks. Since the platinum stocks are already historically low and unlikely to recover significantly without a sustained market surplus, the reduction in circulation of the metal has increased the price sensitivity and likely has been a significant factor in the rise in platinum prices since mid-2025, according to the WPIC.
Above ground platinum stocks have fallen by 52 percent from 2022 to 2026 and will continue to decline:
While overall metal demand has not changed significantly, the pivot to owning the metal reduces the volume of platinum circulating in the lease market, effectively reducing the liquidity and supporting higher lease rates, perpetuating tight market conditions into 2026, the World Platinum Investment Council concludes.
Recycling weakness
Another bottleneck is platinum recycling, the WPIC notes in its another study, although it would seem that recycling should intensify in response to the sharp price rise and support the supply growth. Recycling appears to be the industry best positioned to respond, as the growth in primary metal production - for the above reasons - is difficult to achieve in the short term. The WPIC’s baseline forecast for 2026 assumes a 10-percent recycling growth, following a similar increase last year. However, a supply growth for recycled auto catalysts often fell short of expectations. Since 2022, actual results for this industry have been, on average, 9 percent below expectations.
Actual recycling performance and forecasts, as well as continuing decline since 2021:
Source: WPIC Platinum Perspectives April 2026
This is happening for two main reasons. Firstly, when the new vehicle market was hit by supply chain disruptions and rising prices, consumers kept on using their vehicles longer, which limited the supply of used auto catalysts. Secondly, in 2023 and 2024, low PGM prices limited the economic incentives for recycling, which resulted in stockpiling auto catalysts at some scrapyards, according to the WPIC.
Now, the expected increase in supply in recycling may also face working capital constraints due to high prices for PGMs and interest rates, according to the WPIC. Banks are cautious in extending credit lines, which limits the potential production.
Secondly, the war in Iran and disruptions in the Strait of Hormuz are affecting trade in the Middle East. The UAE is a significant hub for collecting and recycling PGMs from auto catalysts, and a long-drawn-out conflict could restrict metal flows, the WPIC notes.
According to the WPIC estimates, the decline in recycling efficiency could increase the projected platinum market deficit to 240,000 ounces in 2026 and perpetuate a palladium deficit.
Impact of war in Iran
The impact of the war in Iran on the industry is not limited to this. The conflict is increasing mining companies’ overall costs, Heraeus notes in one of its weekly reports. While higher PGM prices are supporting mining companies’ revenues, increasing oil and electricity costs and the growing wages will reduce the profitability. Diesel prices in South Africa are expected to double by May compared to their pre-Iran-Israel conflict levels, directly impacting the mining volumes. South Africa’s Eskom also raised electricity tariffs by 8.76 percent starting from April 1. These factors, combined with increased capital expenditures, will push industry’s production costs in South Africa in 2026 significantly above inflation, according to Heraeus.
Valterra continues to closely monitor the impact of the conflict in the Middle East on raw material production costs, the company reported in its operating report at the end of April.
Demand for platinum group metals from customers remains strong despite the mounting of global geopolitical tensions, said Implats’ CEO Nico Muller. However, the war could impact the production costs “We are closely monitoring the impact of events in the Middle East on our supply chains, with steps taken to buffer availability of critical consumables and spares at our operations.”
Sergey Bondarenko for Rough&Polished
