Platinum market set for fourth consecutive annual deficit as tight supply supports investment case

The report forecasts a deficit of 240,000 ounces in 2026, following a 1.082-million-ounce shortfall in 2025, the largest deficit recorded in the series, dating back to 2013.

In an interview with Kitco News, Edward Sterck, Director of Research at the World Platinum Investment Council, said that despite the smaller deficit forecast for this year, market fundamentals remain tight, which is expected to provide further support for prices even as volatility remains elevated.

“We’ve had three years of peak deficits that have drawn down above-ground stocks to unsustainably low levels,” said Sterck. “A further deficit in 2026 just perpetuates that — it doesn’t replenish those stocks.”

According to the WPIC, cumulative deficits since 2023 are approaching 3 million ounces, leaving global above-ground stocks projected to fall to around 2.6 million ounces by the end of 2026, equivalent to just over four months of global demand.

Investment demand drove record deficit in 2025

In the report, the WPIC said that last year’s record deficit was primarily driven by a surge in investment demand as investors turned to platinum amid geopolitical uncertainty and strong precious-metals sentiment.

Total platinum demand reached 8.297 million ounces in 2025, up slightly from the previous year, while supply slipped 1% to 7.215 million ounces, resulting in the record market shortfall.

Investment demand was particularly strong, rising 65% year-over-year, fueled by increased ETF holdings, bar and coin purchases, and rising exchange stocks.

Sterck noted that the shift in investment flows is a key reason the 2026 deficit appears much smaller on paper.

“We’re not expecting the same level of ETF accumulation or exchange stock builds we saw in 2025,” he said.

Even so, Sterck added that investment demand remains robust, with many ETF holders maintaining positions in anticipation of higher prices.

“We’re expecting ETF holders to stick with their investments, presumably expecting some profit opportunity at higher price levels,” he said.

Industrial demand to moderate but still remains strong

Global platinum demand is expected to fall 8% in 2026 to 7.619 million ounces, largely because the extraordinary investment inflows seen in 2025 are unlikely to be repeated.

However, the underlying demand picture remains relatively resilient across most sectors.

Industrial demand is expected to rebound 11% to 2.124 million ounces, led by renewed capacity expansion in the glass sector and growth in chemical and hydrogen applications.

Automotive demand — the largest source of platinum consumption — is forecast to decline modestly by 3% to 2.943 million ounces, reflecting changes in vehicle production and powertrain mix.

Still, Sterck said slower electric-vehicle adoption and increased hybrid production are providing ongoing support for platinum demand in catalytic converters.

“We’re seeing a softening of environmental targets in some regions, which effectively means internal combustion engines and hybrids remain in the mix for longer,” he said. “That’s supportive for platinum demand in the automotive sector.”

Jewelry demand, meanwhile, is expected to retreat 12% this year after strong growth in 2025, largely due to higher platinum prices and weaker fabrication demand in China.

Volatility likely as tight market persists

Even with the smaller projected deficit, Sterck said the platinum market is likely to remain volatile due to tight supply conditions and broader macroeconomic uncertainty.

“I think the rationale for making strategic long-term investment decisions in platinum remains intact,” he said. “But where you have very tight market conditions, you can probably expect volatility.”

Sterck added that the same macroeconomic and geopolitical factors that helped drive precious-metals prices higher in 2025 — including geopolitical tensions, trade disputes and policy uncertainty — remain firmly in place.

“The factors behind last year’s price rally are still in play,” he said. “You’ve got strong supply-demand fundamentals, structural deficits continuing, and a macro environment that remains supportive for precious metals.”