A RECOVERY in supply and reduced investor demand resulted in an oversupply of platinum in the first quarter of this year, said the World Platinum Investment Council (WPIC) in an update on Friday.
However, the precious metal was heading for a fourth consecutive deficit this year with a “reversal of Q1 trends” expected in the remaining three quarters. A deficit of 297,000 ounces in 2026 has been forecast by the council.
The major factor in the first quarter that will be absent for the remainder of the year was the 18% supply growth, especially from South Africa. Supply will be only 2% higher for the year compared to 2025, even factoring in an increase from recycling, the WPIC said.
On the demand side, investor metal redemptions will be a theme for the year. The WPIC expects to see ETF holders more than halve volumes in 2026. In absolute numbers this is small, however – 100,000 oz in each of exchange stocks and ETFs as tariff-related concerns recede and investors look to take profits on the higher platinum price.
In terms of automotive demand, which is especially influential in the palladium and rhodium markets, demand fell 6% in the first quarter to 720,000 oz.
But for the year, this decline will moderate to 2% lower or a total of 2,96 million oz, the WPIC commented in its report. This is despite headwinds from macroeconomic uncertainty and oil-shock concerns related to the Middle East conflict, it added.
An important factor in platinum market optimism is policy change on electric vehicle adoption. Canada and Europe have extended targets giving the internal combustion engine a fresh lease of life although the biggest beneficiary is the hybrid car market.
The WPIC expects ICE production to fall 8% in the light duty vehicle segment which will be offset by a 12% increase in hybrids. Market support will also come from the ICE heavy duty segment in the India and US markets, the WPIC said.
In fact, the mood in the platinum market remains elevated days ahead of London Platinum Week, due to kick off on May 18.
“I think everyone’s still very constructive on the underlying fundamentals of platinum,” said Ed Sterck, director of research at the WPIC in an interview. “We’ve got very constrained supply, a little bit of recovery in recycling driven by higher prices, and demand is largely price-inelastic,” he said.
The platinum price has doubled since May last year although in the last month it has weakened, down 2%. René Hochreiter, an analyst for Noah Capital, while bullish on the long term fundamentals for platinum group metals, said in a recent note that the commodities trade was “on hold” owing to interest in oil, stoked by the Middle East conflict.
“Platinum’s price performance in 2025 and robust levels in 2026 have significantly increased global attention on its investment potential,” said Trevor Raymond, CEO of the WPIC. “A far wider cohort of investors is now actively considering platinum’s precious attributes together with its compelling supply and demand fundamentals, as ETF demand in 2025 and this year’s expected bar and coin strength highlight,” he said.
