Platinum prices rose to $1,050 an ounce today (20 May) and hit a 14-week high as the market comes to realise that the platinum group metals (PGMs) market is set to face an even bigger deficit after several years of supply shortages.
The World Platinum Council (WPIC) released its latest quarterly report on Monday, raising its forecast platinum supply deficit to 966,000 ounces, up from 848,000 ounces previously. The report found that after three consecutive years of supply shortfalls, the structural deficit in the platinum market is embedded and continues to deplete above-ground stocks, which are expected to fall to barely three months of demand by the end of this year.
WPIC said platinum remains a strong investment despite continued economic uncertainty. While the large deficit seen in the platinum market in the first quarter of 2025 failed to sustain platinum prices, this was likely due to investor fears that tariffs and the potential repatriation of accumulated stocks on the New York Mercantile Exchange would undermine demand, the report said.
Ole Hansen, head of commodities strategy at Saxo Bank, also said that platinum was the ‘forgotten precious metal’ and that the ongoing market deficit was starting to attract attention. Eventually, the narrowing trading range, which is now challenging on the upside, will be broken.
However, according to Commerzbank analyst Carsten Fritsch, platinum’s upside in 2025 may be limited, with weak demand likely to continue to weigh on platinum prices. Platinum is expected to trade at $1,000 per troy ounce by the end of this year. 2026 could see the price rise to $1,100 per ounce as the economy recovers.
Meanwhile, the demand outlook for platinum group metals – platinum, palladium and rhodium – in 2025 is very uncertain, as their use in automotive and industrial applications is likely to be lower than expected due to US import tariffs and retaliatory measures by other countries, automotive catalysts producer Johnson Matthey said in a recent report.
According to Rupen Raithatha, the company’s director of market research, PGM use in the automotive sector is expected to fall by 5 per cent this year, with the risk of a further decline if tariffs lead to a reduction in vehicle production.
Johnson Matthey expects this to be the third year of severe shortages in the platinum market, with mine supply down 3 per cent due to production constraints in South Africa, and secondary supply down in all regions except China. Automotive platinum use is expected to decline by 5 per cent by 2025 from its highest level in almost 16 years as battery electric vehicles gain share of the car and truck market.
