PLATINUM will be in balance in 2026 ending three consecutive years of supply deficit owing to higher recycling and as investment demand falls 52%, according to the World Platinum Investment Council (WPIC) on Wednesday.
The decline in investment demand will be driven by an easing in US trade tensions, and profit-taking. Of a 437,000 ounce decline in absolute total platinum demand in 2026, some 385,000 oz would be from investors, the council said in a third quarter market report.
While the security of critical mineral supply and increasing allocations to hard assets as interest rates declined “will persist well into the medium-term”, lower investment demand “is the largest factor of a narrower market balance in 2026,” it said.
On the supply side, recycling would increase 10% while primary mine supply would be 2% higher, recovering from major interruptions in 2025. Total supply would be 4% higher. All in all, there would be a 20,000 oz surplus in platinum for 2026, the council said.
Asked if the WPIC had taken a conservative approach for 2026, after a year in which the platinum price gained 72%, the council’s head of research, Ed Sterck, replied: “I think there is an element of conservatism. We would have a 300,000 ounce deficit for next year if trade tensions are maintained and if ETF holders continue to maintain their holdings”.
In any event, certain supply and demand ‘themes’ of 2025 would persist into next year such as constrained mined supply and a continued decline in automotive demand, the council said. The adoption of electric cars has been lower than forecast but the drivetrain would inevitably move towards electrification, it added.
For 2025, the WPIC revised its forecast supply deficit down by 158,000 oz to 692,000 oz, partly owing to a better-than-expected recovery in mined supply from South Africa. Total supply would increase 2% to 7.1 million oz for the year against total demand of 7.8 million oz, a decline of 5% owing to weaker industrial demand.
Despite the improvement in mine supply from South Africa in the second half of 2025, production had a hard time of it for the year. Heavy rains in the first quarter interrupted operations in South Africa. Mined supply was forecast to be 5% lower in 2025.
According to a report by RMB Morgan Stanley this month, South African mine production of platinum group metals (palladium, rhodium and other minor metals in addition to platinum) will fall 5.5% over five years compared to 2024 supply.
The improvement in PGM prices, as well as platinum this year, could give “some headroom” for incremental life of mine extension and restart opportunities in South Africa, such as at Impala Platinum’s Two Rivers Merensky project. Yet sut such projects were “only likely to partially offset some of the expected depletion in existing mines”, the bank said.
Added Sterck: “What I would say is that higher prices probably help support operations at or perhaps modestly above current levels over the next few years, for a bit longer.
“But the main mines are inherently inflexible in terms of the fact they’re deep, they’re reef ore bodies, large tabular bodies, [so] the ability to flex output quickly is quite limited”.