Theme of the Day: Platinum in a fourth consecutive market deficit in 2026 - WPIC

The platinum market continues to be undersupplied, and, despite geopolitical headwinds in the Middle East, platinum demand is well insulated, according to the latest quarterly report by the World Platinum Investment Council (WPIC). Incoming emissions regulations are supportive of automotive demand, while a renewed focus on regional energy security is reinvigorating interest in hydrogen technologies, a longer-term demand accelerant. Platinum is also playing a vital role across many technologies underpinning the rollout of AI infrastructure – from optical communications to data storage. The platinum market recorded a surplus of 268koz in Q1 2026. This reflected both year-on-year total supply growth of 18% (+267koz to 1,736koz) on unseasonably strong output from South Africa, and a 31% year-on-year reduction in total demand (-659koz to 1,468koz), the single largest factor being ETF and exchange stock outflows totalling 374koz. Total bar and coin investment demand growth is set to maintain momentum, rising 27% to 718koz in full year 2026, propelled by a strong first quarter and growth across all regions. Total platinum demand is expected to reduce 9% year-on-year to 7,674koz, predominantly because last year's significant exchange stock and ETF inflows are not expected to reoccur. Automotive platinum demand declined by 6% year-on-year (-46koz) to 720koz in Q1 2026. In full year 2026, this is expected to moderate to a 2% year-on-year reduction (-72koz) to 2,959koz, despite headwinds from current global macroeconomic uncertainties and oil-shock concerns in relation to the current crisis in the Middle East. A projected 8% reduction in pure internal combustion engine (ICE) light-duty vehicle production will be mostly offset by a 12% increase in hybrids, with additional support coming from the ICE heavy-duty segment in the US and India. Strengthening industrial demand, increasing 9% to 2,238koz, on the resumption of glass capacity expansions, partially offsets lower automotive and jewellery demand (-2% and -12%, respectively). Total platinum supply is set to increase by 2% as recycling grows 9%, incentivised by higher prices, while mine supply is projected to be flat. The forecast for a fourth consecutive market deficit in 2026 has deepened modestly to 297koz (previously 240koz). Further depletion of above ground stocks is expected, with just under three months worth of cover to meet global demand now expected by the end of 2026 at 1,747koz. In 2026, total investment demand is forecast to reduce by 54% year-on-year to 519koz. Exchange stocks and ETFs are expected to see net outflows of 100koz each as tariff-related concerns recede and investors look to take profits on the higher platinum price when compared to this time last year. While these outflows are relatively modest, they represent a considerable swing versus the inflows seen in 2025. In contrast, total bar and coin investment is expected to jump by 27% (+151koz) to 718koz – a six-year high.