Despite recording its first quarterly surplus in six quarters, the global platinum market is projected to face its fourth consecutive annual supply deficit in 2026. This outlook, detailed in the latest Platinum Quarterly report published by the World Platinum Investment Council (WPIC) on May 18, highlights persistent supply concerns juxtaposed against robust demand across several key sectors.
The WPIC’s report, which provides a comprehensive review of Q1 2026 and a revised full-year outlook, indicates that while platinum supply increased by 18 percent year-on-year in the first quarter, resulting in a surplus of 268,000 ounces, these trends are expected to reverse in subsequent quarters. For the full year, total platinum supply is forecast to grow by a modest 2 percent, while total demand is anticipated to decline by 9 percent to 7.674 million ounces. However, this projected reduction in demand is insufficient to avert a deficit, albeit one that is expected to be approximately 75 percent smaller than the previous year’s shortfall.
Trevor Raymond, CEO of the WPIC, affirmed the market’s underlying tightness, stating, “The market continues to be undersupplied, and, despite geopolitical headwinds in the Middle East, platinum demand is well insulated.”
Demand Dynamics: Sectoral Shifts and Resilience
Platinum demand experienced a 31 percent year-on-year drop in the first quarter, primarily driven by exchange-traded fund (ETF) and exchange stock outflows. However, the full-year forecast of a 9 percent decline masks significant variations across key segments, with industrial demand and physical bar and coin investment emerging as notable growth areas.
Automotive Demand
The automotive industry remains the largest demand segment for platinum, accounting for 36 percent of total consumption. Platinum’s use in catalytic converters for internal combustion engine (ICE) vehicles saw a 6 percent year-on-year decline in Q1, influenced by the increasing adoption of electric vehicles. For the full year, this decline is projected to moderate to 2 percent. This resilience is attributed to supportive emissions regulations in China, the US, and Europe, which necessitate increased platinum usage, alongside a growing trend towards hybrid vehicles over pure electric models and increased uptake in ICE heavy-duty vehicles in major markets like the US and India.
Jewelry Demand
Representing 26 percent of total demand, the jewelry sector is highly price-sensitive. Q1 saw a 13 percent year-on-year drop in platinum jewelry demand, with a projected full-year decline of 12 percent. This downturn is linked to elevated platinum prices, weakened consumer sentiment, ongoing destocking within the supply chain, and a shift from larger investment pieces to investment bars. China experienced the most significant decline, with demand falling 42 percent, partly due to the government’s removal of a 13 percent value-added tax rebate for platinum delivered via the Shanghai Gold Exchange, enacted in November 2025. Conversely, the European platinum jewelry market is set for a record high in 2026, and India is expected to see 5 percent growth, though these gains are insufficient to offset declines in other major markets, including the US, Japan, and China.
Industrial Demand
The industrial sector is poised to surpass jewelry as the second-largest demand segment in 2026. Q1 industrial demand surged by 41 percent year-on-year, primarily driven by an 83 percent forecast jump in the glass segment for the full year. Platinum’s exceptional resistance to heat, oxidation, and corrosion makes it crucial for manufacturing fiberglass, optical glass, and substrates for AI technology components and flat panel displays. Growth is also anticipated in the medical, electrical, and hydrogen segments. However, the chemical segment saw a 4 percent drop in Q1, and the petroleum segment declined by 28 percent year-on-year, with the latter’s full-year forecast also at a 28 percent drop due to supply disruptions caused by the Iran war.
Investment Demand
Investment demand, which constituted approximately 13 percent of total demand in 2025, experienced a significant reversal in Q1. Following the outbreak of the Iran war and rising concerns over inflation and interest rates, investors took profits, leading to ETF outflows of 374,000 ounces and a net disinvestment of 225,000 ounces. These outflows were a primary factor in the Q1 market surplus. Despite this, demand for physical platinum bars and coins jumped 42 percent year-on-year in Q1, led by Asian markets. The WPIC projects a 27 percent boost to total platinum bar and coin investment for 2026, reaching 718,000 ounces—a six-year high. Trevor Raymond noted, “Platinum’s price performance in 2025 and robust levels in 2026 have significantly increased global attention on its investment potential.” However, total investment demand for the year is still forecast to decline by 54 percent as the market adjusts expectations for non-yield generating assets and ETF demand unwinds further.
Supply Dynamics: Modest Growth Amidst Challenges
Total platinum supply is projected to increase by 2 percent in 2026. While the platinum price reached record highs in January, averaging approximately 100 percent higher in Q1 compared to Q1 2025, this has not yet translated into a substantial increase in mine production.
Mine Supply
Platinum mine supply improved by 22 percent year-on-year in Q1, but analysts anticipate it will remain flat for the full year at 5.551 million ounces. South Africa was a key contributor to this Q1 boost, with refined output up 41 percent year-on-year, largely due to Valterra Platinum’s return to normal production following 2025 flooding disruptions and a shift in planned maintenance. In contrast, major platinum-producing regions like Zimbabwe and Russia experienced Q1 declines. The WPIC highlighted the challenges in increasing production, noting that Ivanhoe Mines’ Platreef mine represents the first greenfield project commissioned since 2019, underscoring the difficulties miners face in rapidly responding to price signals.
Recycling Supply
Recycling is expected to be a significant driver of the projected 2 percent increase in total platinum supply for the year.
Despite the Q1 surplus and a smaller projected deficit for 2026, the cumulative impact of four consecutive annual shortfalls has left the physical platinum market tight. The WPIC emphasizes that a series of material market surpluses would be necessary to rebuild aboveground stocks to sustainable levels. By the end of 2026, aboveground stocks are forecast to be reduced to 1.747 million ounces, representing just under three months of global demand, underscoring the ongoing supply tightness in the market.
