Sustained market deficits may have laid the groundwork for platinum’s price appreciation this year, but geopolitics and macroeconomics provided a tailwind. Heightened uncertainty, triggered by evolving U.S. trade policy and the threat of tariffs, has led to geographic demand dislocation and competition for metal, with security of supply a key theme that has emerged during 2025. Market tightness has prevailed, evidenced by the sustained elevation of platinum lease rates and backwardation in the London over-the-counter (OTC) market.

The investment case for platinum remains compelling. The market is forecast to record its third consecutive significant annual deficit in 2025 (estimated at 692 koz), which will deplete above ground stocks (AGS) to only five months of demand cover. Although high prices typically encourage markets to self-solve for structural deficits by either incentivizing new supply or pricing demand out of the market, history shows that both platinum supply and platinum demand can be remarkably price inelastic over near-to-medium term time horizons. WPIC’s two-to-five-year platinum market forecast anticipates that AGS will be substantially depleted by the end of the decade, as diverse and resilient demand continues to outstrip constrained supply.  

While our initial forecast for 2026 suggests a balanced platinum market, with a small 20 koz surplus, this is dependent upon an easing of trade tensions allowing an outflow from CME Group warehouses to more normalized levels, and the higher platinum price prompting some profit taking from exchange traded funds (ETFs) (Figure 2). Should trade tensions fail to abate, then 2026 could become another year where we see platinum supply again fall short of demand as these investment outflows do not materialize. In any event, the forecast market balance this year will not remedy the depletion of AGS, meaning tight market conditions are likely to persist.

Further, and alongside platinum’s strong fundamentals, platinum prices could well continue to benefit from broader demand for precious metals as investors seek diversification to mitigate anticipated dollar depreciation. The trend for increased portfolio allocation to precious metals, a development that supported the broad-based rally in precious metals prices seen in 2025, looks like it will persist well into the medium term, especially should interest rates continue a downward trajectory.

Total platinum supply is forecast to decrease by 2% year-on-year to 7,129 koz during 2025. Mine supply will be depressed (-5% year-on-year) as producers are unable to repeat the drawdown of work-in-progress (WIP) inventory seen in 2024. WIP inventory relates to ore that has been mined and partially processed in previous years but has not been refined to a saleable product. Higher prices will support recycling supply growth of 7% year-on-year, albeit this is insufficient to offset lower mining volumes. Total platinum demand is expected to decline by 5% year-on-year to 7,821 koz in 2025. Cyclically weak industrial demand (-22% year-on-year) is the primary factor underpinning decreasing demand in 2025 versus 2024. This year, the platinum market is forecast to record its third consecutive annual deficit, at 692 koz.

Platinum mine supply is forecast to increase 2% in 2026 versus 2025 as some WIP inventory is released. Supply from recycling is set for growth of 10% year-on-year as higher prices incentivize processing of spent autocatalysts and more selling of jewelry scrap. Total platinum supply is forecast to increase by 4% year-on-year during 2026, while total platinum demand is forecast to decrease by 6% year-on-year to 7,385 koz. After three years of deep deficits, the platinum market is expected to be more balanced in 2026, with a small surplus of 20 koz.

Platinum investment demand accounts for 385 koz of the 437 koz absolute reduction in total platinum demand for 2026, with a projected 150 koz of CME Group exchange stock outflows on easing U.S. trade uncertainty and Section 232 clarification, and 170 koz of price-linked ETF profit taking. It is important to recognize that the ETF outflows are only likely to arise from investors selling into a strong price environment. However, given current momentum across the precious metals complex, if the market continues to expect further price upside next year, it is not unforeseeable that accumulations instead occur in 2026. This potential upside is supported by the investment trend towards broader precious metals allocations and the attractive longer-term outlook of consecutive platinum market deficits resuming from 2027 through to the end of the decade.

Further, our analysis demonstrates that platinum supply and platinum demand are relatively price inelastic. Platinum mining is predominantly from deep-level underground mines, meaning that it is difficult to flex output in the near- to medium-term, with capital intensive, long-term development time horizons. Meanwhile, combined automotive, jewelry and industrial demand is forecast to decrease by just 1% year-on-year in 2026, again reflective of some degree of broader price inelasticity (particularly within the automotive and industrial markets). Over the medium term, improved trade certainty should improve platinum’s non-investment demand prospects in key automotive and industrial end markets.

By the end of 2025, three years of substantial platinum market deficits will have meaningfully depleted AGS (-42%, -2,341 koz), and less than five months of demand cover will remain. This depletion is the main driver supporting higher platinum prices (Figure 3). The forecast for a more balanced market in 2026 will not remedy the depletion of AGS, meaning tight market conditions are likely to persist.

Vaulted platinum stocks have been eroded on the back of several years of consecutive market deficits, in turn reducing the physical availability of metal. Furthermore, trade tensions and competition for platinum have locked metal up in geographies where it is unavailable to be lent out (e.g. China). This speaks to a growing narrative around critical mineral supply security at both an industrial level, but also more broadly at a national level. 

Depleting metal stocks have seen platinum’s implied one-month lease rate, which is the cost to borrow metal, increase to an average of 12% year-to-date (before any credit spread), up from an average 1% in full year 2024 (Figure 4). One of the main drivers of higher lease rates is a lack of physical supply. Either the metal is not available to be leased, or the holders of platinum are unwilling to lease the metal at current rates.

Higher lease rates should be supportive of higher platinum prices, as buyers reconsider their procurement strategies to switch from leasing to outright purchasing, or to also include some defensive purchasing. Data available from the LBMA/LPPM suggests that this change is occurring, with leasing volumes declining as lease rates have risen and the timing coinciding with the inflection point at the beginning of the platinum price rally in May (Figure 5).

China – the single largest consumer of platinum globally and an underdeveloped market for platinum investment prior to 2019 – has grown to be the number one market for platinum bar and coin investment, accounting for a forecast 80% of total platinum bar and coin demand in 2025 (including platinum investment bars equal to or greater than 500g). This number one position is forecast to be maintained in 2026, with a reduced market share of 64% as other markets are expected to strengthen. At the same time, demand for platinum jewelry (with its quasi-investment status) in China has returned to growth after a period of decline as fabricators are returning to platinum due to its heavy discount to gold.  

While moves in ETF holdings and exchange stocks are expected to push platinum towards more balanced market conditions in 2026, the sustained elevated lease rates and strong backwardation in the OTC forward market highlight that balancing flows from AGS to fill the 2025 deficit have been insufficient to ease tight market conditions. Ultimately, the slow responsiveness of supply and demand volumes to substantially higher prices supports the entrenched nature of tight platinum markets, which continues to bode well for platinum’s attractive investment case. 

In summary:

• WPIC research indicates that the platinum market entered a period of supply deficits from 2023-2025, which will resume after the balanced market conditions forecast for 2026. These are expected to substantially deplete AGS by the end of the decade.
• Platinum supply remains challenged, both in terms of primary mining and secondary recycling supply. 
• Elevated lease rates and OTC London backwardation highlight tight market conditions.
• Platinum is a critical mineral to many economies and is recognized for its importance in the global energy transition, underpinning a key role in the hydrogen economy.
• The platinum price remains historically undervalued and significantly below the price of gold.

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