JOHANNESBURG (miningweekly.com) – Investment demand for platinum is expected to be “extremely robust” in 2026.

“We've not only got the attractiveness in terms of platinum’s underlying supply demand fundamentals, but we also have a very uncertain macro-political environment, and that’s creating strong demand for all of the precious metals as a store of value,” World Platinum Investment Council research director Edward Sterck emphasised to Mining Weekly on Zoom interview, following the release on Wednesday, March 4, of the latest Platinum Quarterly and full year 2025 update, with a revised forecast for 2026. (Also watch attached Creamer Media video).

Bar and coin demand is set to reach a six-year high in 2026 at a time when above-ground platinum stocks have depleted to just over four months’ worth of global demand.

Persisting tight market conditions are pointing to considerable value volatility and price action.

“I think that platinum as an investment is a very good place to be positioned right now,” Sterck highlighted.

Mining Weekly: What are the key factors contributing to the platinum market deficit of more than one-million ounces in 2025 and the fourth consecutive deficit for the end of 2026. Why has the forecast gone from balance to deficit since your November market update?

Sterck: The key change between our November update and today is really investment. So, fundamentally, for 2025 we've moved from a deficit of a little over 650 000 oz to a deficit of over a million ounces. That's primarily due to higher exchange traded fund (ETF) demand and due to the exchange stocks in the US remaining at elevated levels and not seeing the outflows that we were anticipating previously. Looking through into 2026, many of the themes that occurred last year are continuing. Again, it's stronger or more robust ETF investment demand. We're not, at the moment, projecting higher ETF demand, but we're just anticipating that we’ll see less in the way of profit taking than we’d forecast before and we're also expecting those exchange stock holdings to remain stickier in the US on a continuation of trade tensions. So, effectively, the quarter of million-ounce deficit we're expecting for 2026 versus the balance market we were anticipating previously, that's mainly just reflecting on that sort of stronger and more robust investment demand environment.

What is the outlook for mine supply in 2026 and what is fuelling the growth in recycling supply? 

Broadly speaking, we're expecting mining supplies to remain effectively flat. We've got much higher prices. The basket price is substantially elevated from where we started 2025 but these are deep-level underground mines for the most part, and so inherently inflexible. Whilst I'm sure the miners may wish in an ideal environment to be able to flex output to capitalise upon that improved profitability, you just can't do it that quickly. It's just a function of geology and geotechnics, and so output will remain broadly flat, and is likely to remain that way for a number of years to come. In terms of recycling supply, that’s more price elastic. Effectively, if you think about the catalytic converters you find on an average vehicle, it's usually two to three within any exhaust system. Yet the PGM metals are not evenly distributed amongst those catalytic converters. One of them is typically more highly loaded than the others, and so those other ones, in times of low prices, are not necessarily economic to recycle and recover the metals from. With higher prices, however, they are economic, and so we're expecting more of that supply to come through the system.

What are the key areas of demand forecast for 2026?

Well, it's a small change on our previous estimates, but I think thematically, it’s quite impactful. If you look at automotive demand, we've upgraded that by 15 000 oz, which is fairly small in the context of a demand segment that's almost three-million ounces. But that upgrade is on the fact that we've seen a number of policy changes around the world – in Europe and in the US in particular – that have pushed back or slowed down the pace of anticipated electrification. That means more internal combustion engine (ICE) vehicles, predominantly hybrids, which is obviously best for the environment, but therefore it also means higher-for-longer PGM demand. The two other areas I'd focus on for 2026 are jewellery, which we are expecting to be slightly weaker versus 2025, and investment demand. Jewellery is the most price elastic area of demand. We've obviously got substantially higher prices, and so we're expecting slightly softer jewellery demand. I would note, however, that platinum has a bit of an advantage versus, say, gold, for example, where it's got greater relative exposure to the bridal market and also to the gemset market, where you're using platinum to hold gemstones, and those are a bit more defensive in periods of higher prices or economic uncertainty. Then investment demand is expected to be extremely robust this year. We've got not only the attractiveness in terms of platinum’s underlying supply demand fundamentals, but we also have a very uncertain macro-political environment, and that is creating strong demand for all of the precious metals as a store of value.

Why are we seeing such a huge bar and coin demand?

People are looking for non-currency investment opportunities, covering all of the precious metals. Obviously, gold would be the most obvious place to go to, and it's where central banks tend to gravitate towards. But I think it's helping platinum, silver and, to a lesser extent, possibly even palladium. It's very much, in terms of platinum, being led by China. We’re also seeing strong demand out of the US, but due to high platinum lease rates, there's a bit of a shortage of product availability. So, China is very much the focus of 2026.

Despite the strong bar and coin demand expectations, the total investment demand is set to fall in 2026. Why is this so?

Well, in a way, that's what the numbers say. Off the top of my head, it's down 46% year-on-year. But it's not actually a decline in investment demand. It's just simply that we're not forecasting the same ETF additions and the same additions to exchange stocks as we saw last year. But we're expecting them to remain broadly at the levels that they reached by the end of December. It's a bit hard to explain, but that effectively actually represents a really strong demand environment. We're not expecting to see demand outflow in terms of ETF disposals or exchange stock unwinding. So, although on paper, it looks like it's down quite significantly year-on-year, actually it's still really robust.

Is it worrying that above-ground stocks have been depleted to just over four months’ worth of global demand through 2026 and do you see this deepening further?

I'll cautiously say that, yes, it is a bit worrying. At the end of the day, above-ground stocks are a critical part of any commodity market’s day-to-day normal functioning. What was the catalyst for the beginning of the price rally last year? Arguably, it was the depletion of above-ground stocks to unsustainably low levels and with another deficit forecast for 2026, we're clearly not seeing those above-ground stocks being replenished. So, the key takeaway here is that tight market conditions are likely to persist, and that could lead to quite a lot of volatility in terms of value establishments and price action.

Summing up, Ed, what is the investment case for platinum going forward and will we continue to see high prices? 

There’s really two things worth considering, and they’re somewhat interlinked. Firstly, a lot of what occurred in 2025 and was behind the price rally, both in terms of starting it and then sustaining it through to the end of the year, is going to persist into 2026. So, fundamentally, we've got extremely strong underlying fundamentals for platinum. We've got an ongoing supply/demand deficit that looks set to persist through 2026 and most likely beyond that, and we've also got this very uncertain macro-political environment that is pushing investors towards alternative investments, hard assets and particularly precious metals. Just look at what's happened over the course of the last week or so with US action in Iran and so on. That uncertainty is the key component of this and I think that platinum, as an investment, is a very good place to be positioned right now, given it's got the backstop of those very strong underlying fundamentals with the supply plan disconnect, but also as a precious metal investment in terms of ongoing macro-political uncertainty.

GUANGZHOU FUTURES EXCHANGE

One item not yet captured in the supply/demand balance is any exchange stocks warehoused with the Guangzhou Futures Exchange, which could potentially deepen the deficit versus current projections once these are made publicly available, World Platinum Investment Council CEO Trevor Raymond pointed out in a media release to Mining Weekly.

In addition, the World Platinum Investment Council is continuing to work with product partners to grow platinum investment in all major global markets.

Over the past 11 years, meaningful long-term relationships have been developed and the trust of investors, partners, and policy makers has been gained.

Illustrating this is a recently-launched initiative with a major Chinese bank and leading jewellery retailer to make platinum investment bars available through bank branches for retail customers.

Coming on the back of record Chinese investment demand in 2025, this initiative is viewed as having the potential to further grow platinum investment volumes in 2026 and beyond, Raymond added.

STRONGER FOURTH QUARTER

Stronger-than-expected quarter-four investment demand – fuelled in part by a rally in platinum prices – saw the platinum market deficit for full year 2025 increase to 1 082 000 oz.

This is the deepest shortfall in the Platinum Quarterly data series going back to 2014.

In full year 2025, total demand reached its highest level for nine years, up 1% year-on-year to 8 297 000 oz, led by very strong investment demand and jewellery demand growth. Total supply saw a contraction of 1% to 7 215 000 oz.

The fourth consecutive annual 240 000 oz deficit looming in 2026 is in contrast to the initial broadly balanced market forecast, which reflects strong investor sentiment supporting stable ETF holdings as opposed to previous expectations of profit taking.

Total demand in 2026 is anticipated to be 8% (-678 000 oz) lower year-on-year at 7 619 000 oz. Total supply is projected to increase 2% year-on-year to 7 379 000 oz on the back of recycling supply growth alone.

In aggregate, the total market shortfall that has accumulated since 2023 is expected to approach three-million ounces by the end of 2026.

By extension, already depleted above-ground stocks will fall further to a projected 2 613 000 oz.

Following full-year 2025 mine supply declining 4% year-on-year to 5 551 000 oz, 2026, mine supply is forecast to be a flat 5 553 000 oz, with gains from South Africa and Zimbabwe offset by declines in North America and Russia.

A recovery in recycling supply began in 2025 as higher prices encouraged the flow of spent autocatalyst material and higher jewellery recycling, especially in China.

Recycling supply increased 10% year-on-year to 1 664 000 oz. Growth in recycling supply in 2026 is expected to rise 10% to 1 827 000 oz.

REDUCED AUTOMOTIVE DEMAND MITIGATED

In 2025, lower automotive demand was mitigated by a 17% increases in light-duty hybrid vehicle production and a 4% increase in heavy-duty vehicle production, softening the overall catalysed vehicle production fall to just a 2%-fewer year-on-year 3 035 000 oz.

The 2026 forecast is for automotive demand to contract by 3% to 2 943 00 oz, which reflects 1% lower heavy-duty demand and 7% lower ICE light-duty vehicle production, outweighing a 12% increase in hybrid vehicle production and 3% growth in the non-road segment.

Owing to higher precious metals prices, jewellery demand is forecast to fall 12% year-on-year in 2026 to 1 927 000 oz, broadly in line with the five-year average. The biggest swing is expected in China, where fabrication is forecast to reduce by 36% year-on-year to 371 000 oz after an exceptionally strong performance in 2025.

In North America, higher absolute platinum prices will affect volumes, although expenditure on platinum jewellery is projected to grow strongly; demand is forecast to decline by 13%.

In Japan, demand is expected to contract by 5%.

In Europe, record growth in recent years is forecast to stall, with demand almost flat.

In India, a return to growth is expected with fabrication increasing 7% as exports normalise and the domestic market expands.

INDUSTRIAL DEMAND REBOUND

In 2026, industrial demand is projected to rebound, rising 11% to 2 124 000 oz, with the recovery being led by the glass sector, which is forecast to grow by 92% to 340 000 oz.

Further support will come from a 10% increase in chemical demand to 633 000 oz and a 7% rise in hydrogen stationary applications to 69 000 oz.

These gains will be partly offset by a 17% contraction in petroleum demand to 154 000 oz.

HUGE INVESTMENT DEMAND

In 2025, total investment demand rose by a 65% higher 456 000 oz year-on-year to 1 157 000 oz, reflecting strong China-led bar and coin demand, which almost doubled year-on-year to 372 000 oz. Platinum ETF holdings increased by 7% to 3 540 000 oz by year end 2025.

Exchange stocks, which started the year at 270 000 oz, had significantly higher-than-normal net inflows of 384 000 oz during the course of 2025, initially owing to tariff-related concerns and more recently because of uncertainty around the US government’s Section 232 Investigation.

In 2026, total investment demand is projected to reduce by 46% to 625 000 oz, on the assumption that trade tensions ease and elevated exchange stocks unwind slightly, leading to a 100 000 oz outflow. Further, ETF holdings are forecast to hold steady, neither increasing nor decreasing.

As total bar and coin investment rises to a likely 35%-higher 725 000 oz, gains are expected across all markets amid notable interest from India, which has recently been identified as a new geographic region to monitor from a platinum investment demand perspective.