The platinum market is heading for its fourth consecutive year of undersupply, according to the World Platinum Investment Council (WPIC).
Commodity analyst Carsten Fritsch of Commerzbank AG said the shortfall is expected to reach 297,000 ounces in 2026, slightly higher than earlier forecasts.
“This would mark the fourth consecutive year of a supply deficit in the platinum market,” Fritsch noted, adding that inventories are set to fall sharply.
“With the deficit expected this year, above-ground stocks are set to fall to 1.747 million ounces and the stock-to-use ratio to 22%. Stocks would therefore cover demand for less than three months.”
The cumulative deficit over the past three years has already reached 3 million ounces, underscoring the scale of the imbalance. Last year’s deficit was nearly 1.2 million ounces, the largest on record.
Signs of easing tightness
Despite the grim outlook, there are signs that tightness may be easing.
In the first quarter of 2026, the platinum market recorded a supply surplus of 268,000 ounces—its first in six quarters. That compares with a deficit of 658,000 ounces in the same period last year, representing a swing of 926,000 ounces.
Fritsch explained the shift: “Whilst demand fell by 31% due to ETF outflows, weaker demand from the automotive industry and for platinum jewellery, supply rose by 18% due to higher mine production and increased recycling.”
Mine output rose from a low comparative base, with South African producers shifting maintenance schedules from the first to the third quarter.
Recycling, meanwhile, is expected to rise 9% this year to a five-year high, driven largely by scrapped catalytic converters from the automotive sector.
Demand weakens across sectors
Platinum demand is forecast to fall 9% in 2026 to a four-year low of 7.674 million ounces, according to WPIC.
The sharpest decline is in investment demand, which is expected to more than halve compared with last year.
Net outflows from platinum ETFs and a drop in exchange-registered stocks are weighing heavily on sentiment.
Physical demand for bars and coins is expected to rise, suggesting some investors still favor tangible holdings. But other sectors are struggling.
Automotive demand is falling in Europe and Japan as production of internal combustion vehicles declines, though North America and China are seeing gains, particularly in heavy-duty vehicles.
Jewellery demand is also under pressure. Purchases in China have slumped more than 40%, as buyers shift back to gold after last year’s surge.
That reversal comes after platinum jewellery demand in China hit a seven-year high in 2025. Other industrial uses, such as in the glass industry, are recovering, but not enough to offset declines elsewhere.
Price outlook hinges on gold
The supply-demand dynamics present a mixed picture for prices. On one hand, four years of undersupply and falling inventories suggest upward pressure.
The fact that the market has been undersupplied for four years and that inventories have consequently fallen significantly points to a rise in the platinum price. This is the only way to rebalance the market via an increase in supply and a decline in demand.
On the other hand, rising recycled supply and weakening demand could limit gains.
“Compared with the previous year, however, the supply deficit is expected to be almost 900,000 ounces lower. Should demand trends continue and supply from mining and recycling rise more sharply, the market could shift to a supply surplus – as already happened in the first quarter,” he cautioned.
Commerzbank expects platinum to reach $2,300 per troy ounce by year-end, though Fritsch emphasized that this forecast is primarily tied to expectations of a rising gold price rather than platinum’s own fundamentals.
A market in transition
The platinum market is caught between structural undersupply and cyclical weakness.
Inventories are shrinking, but demand is faltering, particularly in investment and jewellery.
Recycling is rising, reflecting both higher prices and technological shifts in the automotive sector.
For investors, the message is clear: platinum’s price trajectory in 2026 will depend less on its own fundamentals and more on the broader precious metals complex, especially gold.
If gold rallies as expected, platinum may follow. But if demand continues to weaken and recycling expands further, the market could tip into surplus, capping price gains.
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