(Kitco News) - Platinum is back on the move as markets accept that the precious metal will continue to face significant supply deficits for the foreseeable future.
On Monday, the World Platinum Investment Council (WPIC) published its latest quarterly report, raising its forecasted supply deficit to 966,000 ounces — up from the previous estimate of 848,000 ounces. The report attributed the revision to expectations that demand will remain robust through 2025, despite ongoing economic uncertainty. This year marks platinum’s third consecutive annual deficit.
“Notably, the forecast platinum market deficit of 966 koz in 2025 represents a significant 12% of projected demand, and thus it is unlikely that deficits would substantially erode even if a sharp escalation in trade-related economic headwinds arises,” the report said.
While platinum demand is expected to increase this year, it is still forecast to be down 4% from last year, which saw historic levels of industrial consumption.
“While risks to international trade have drawn significant focus in the first quarter, lower demand in 2025 is largely due to a cyclical trough in glass demand, where capacity additions have slowed in China. Sectors such as automotive, jewellery, and investment are arguably more sensitive to short-term shifts in trade policies. However, lower automotive demand and jewellery production for export to the US have been offset by upward revisions to Chinese jewellery and investment demand,” the report said.
Following the report, platinum prices saw a significant push higher, rallying above $1,050 an ounce — up 1.5% on the day and trading at a 14-week high. Platinum is outperforming palladium, with prices currently around $1,025 an ounce.
Looking ahead, the WPIC said that despite ongoing economic uncertainty, there remains a strong investment case for platinum.
“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. Over time, this is an unsustainable situation, as commodity markets typically self-correct for a deficit — either through price increases stimulating supply or discouraging demand. While the large platinum market deficit recorded in Q1 2025 failed to sustain upward moves in the platinum price, this likely stems from investors’ concerns about demand destruction from tariffs and potential flowbacks of accumulated NYMEX stocks,” the report said.
While demand is expected to increase, the WPIC also forecasts weaker supply through 2025, as South African mine output continues to struggle.
“Platinum supply is expected to be depressed in 2025, declining by 4% year-on-year,” the report said.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, described platinum as the “forgotten precious metal”; however, he added that the persistent market deficits are beginning to attract attention.
“Eventually, the narrowing trading range – which is currently being challenged to the upside – will yield a breakout. Only then are we likely to see whether demand from technically focused traders looking for fresh momentum will be enough to push prices higher, or whether gold’s appeal as the ultimate safe haven remains too strong,” he said in a recent note.
However, Commerzbank sees limited upside for platinum this year. The bank noted that weak demand could continue to weigh on prices, even amid another market deficit.
“We remain sceptical about the price outlook and expect platinum to trade at $1,000 per troy ounce at the end of the year. Only in the course of next year is the price likely to rise to $1,100 per troy ounce, in line with the recovering economy,” said Carsten Fritsch, Commodity Analyst at the German bank.
