Will Platinum Continue to Be Ignored
The comments below are an edited and abridged synopsis of an article by Neils Christensen
Platinum Prices Rebound as Structural Market Deficit Deepens
Platinum is regaining investor attention as a sustained supply deficit positions the metal for a potential breakout in the months ahead. According to the latest World Platinum Investment Council (WPIC) quarterly report, the global platinum market is forecast to face a supply shortfall of 966,000 ounces in 2025—an upward revision from the previous estimate of 848,000 ounces. This marks the third consecutive annual deficit, reflecting a broader structural imbalance in the market.
The projected shortfall represents 12% of expected demand for 2025, suggesting the deficit is not likely to ease even in the face of global economic pressures or escalating trade tensions. Platinum responded positively to the report, rising 1.5% on the day to above $1,050 per ounce, reaching a 14-week high and outperforming palladium, which trades around $1,025 per ounce.
The WPIC notes that although total demand in 2025 is forecast to dip 4% compared to the historic levels seen last year, demand is still expected to remain strong across key sectors. The decline is largely tied to a cyclical downturn in glass manufacturing in China, while other sectors such as automotive, jewellery, and investment remain relatively resilient. Specifically, rising domestic Chinese demand for jewellery and investment-grade platinum has helped offset weaker export figures and slower vehicle production.
On the supply side, the outlook remains constrained. South African mine output, a key driver of global platinum supply, is expected to fall by 4% year-over-year in 2025. This continued decline, coupled with steady demand, has resulted in a persistent drawdown of above-ground stocks, which are forecast to drop to only three months’ worth of demand by year-end. The WPIC warns this is unsustainable, as commodity markets typically respond to deficits either through rising prices or reduced consumption.
Despite the Q1 2025 platinum deficit failing to lift prices significantly earlier this year, likely due to investor uncertainty over tariffs and potential flowbacks from NYMEX stockpiles, sentiment appears to be shifting. Saxo Bank’s Ole Hansen referred to platinum as the “forgotten precious metal,” yet he believes the narrowing trading range suggests an imminent breakout, provided traders are encouraged by momentum and technical signals.
Still, not all analysts are optimistic. Commerzbank maintains a conservative stance, projecting platinum to end the year at $1,000 per ounce, with modest growth to $1,100 in 2026, assuming economic recovery gains traction.
In conclusion, platinum is emerging from the shadows as supply challenges and steady demand create a compelling investment narrative. Whether prices can sustain an upward trajectory depends on broader macroeconomic developments, investor sentiment, and how quickly markets respond to the ongoing deficit.