Theme of the Day: Platinum market to end 2025 with 692koz deficit; a more balanced market in 2026

2025 full year forecast: Key factors:- Third consecutive significant platinum market deficit forecast at 692koz. A downward adjustment of 158koz from the previous forecast, predominantly on higher mining and recycling supply.- Supply remains constrained, declining 2% YoY to 7,129koz in 2025. This will be its lowest level in five years, with mining supply falling 5% to 5,510koz, also its lowest level in five years.- Global demand for platinum is robust and becoming more diverse. There are four core segments of platinum demand: automotive, industrial, jewellery and investment demand. Total demand is 7,821koz, a 422koz reduction on the prior year, principally due to the absence of substantive, cyclical glass capacity expansions.- Forecast 2025 automotive demand is 10% above prior five-year average.- Jewellery demand growth of 7% to 2,157koz in 2025 boosted by first-half spike in China.- Total bar and coin investment to record 47% year-on-year growth in 2025 led by surging demand in China.2026 forecast: Key considerations:- Platinum market is expected to move to being in balance in 2026, with a forecast 20koz surplus.- This is dependent upon an easing of tariff fears, allowing a forecast 150koz outflow from stocks held on exchange, and a higher platinum price prompting 170koz of profit taking from exchange traded funds (ETFs).- The substantial 2025 platinum market deficit has been accentuated by trade tension-linked investment flows. Extreme global uncertainty persists and our current forecast for a balanced market in 2026 assumes that trade tensions abate. If these tensions continue, then 2026 is likely to be another year where we see platinum supply again fall short of demand.- Platinum market tightness remains, illustrated by extremely high lease rates and deep backwardation in the London over-the-counter forward market. This tightness has persisted, despite the significant price increase during 2025, which has encouraged metal into the market, suggesting that a further price increase is required to meet ongoing shortages. Rather than ETF liquidations reducing market tightness this year, ETF balances were net positive by the end of Oct, despite the price increase. Sustained market tightness and higher prices in 2026 may well further incentivise ETF holders to increase, rather than reduce, holdings.