Platinum group metals (PGMs) are poised for robust growth this year and into 2026, supported by a powerful combination of tightening supply, rising investor interest, and elevated geopolitical uncertainty. According to Metals Focus in its latest report, Platinum Group Metals Outlook 2026, the sector is entering a decisive new phase after several years of range-bound trading. The firm forecasts sharp gains across the complex next year, with platinum averaging $2,190 per ounce in 2026, up 71% year-on-year, while palladium is expected to average $1,570 per ounce, a 37% increase. Among the smaller and more supply-constrained metals, rhodium is projected to rise 62% to $10,200 per ounce, iridium to rise 64% to $7,200, and ruthenium to more than double to $1,560 per ounce.
A key driver behind the renewed strength in PGMs is a change in how investors view platinum in particular. Wilma Swarts, head of platinum group metals at Metals Focus, said the biggest change has been in investor psychology. She noted that last year’s platinum revaluation was driven less by traditional fundamentals alone and more by strategic accumulation and platinum’s growing correlation with gold.
That trend may continue as geopolitical tensions remain elevated. Metals Focus said the long-running risk of U.S.-Iran tensions could continue to support safe-haven buying and strategic stockpiling in 2026. More broadly, platinum is increasingly seen not just as an industrial metal but also as a hard-asset alternative amid debt concerns, inflation anxiety, and currency debasement. The World Platinum Investment Council (WPIC) echoed that view. In its first-quarter trends report, WPIC CEO Trevor Raymond said, “Platinum’s fundamentals remain attractive to investors. The market continues to be undersupplied, and, despite geopolitical headwinds in the Middle East, platinum demand is well insulated.”
The central pillar of the bullish outlook is tightening supply. Metals Focus said 2025 marks a turning point for platinum group metal prices, and for platinum itself, 2026 will mark the fourth consecutive year of market deficit. The firm forecasts a 312,000-ounce shortfall and inventories falling to 9 million ounces.
WPIC’s figures are similarly tight. It expects the platinum market to post a 297,000-ounce deficit in 2026, with above-ground stocks dropping to just 1.747 million ounces by year-end, equivalent to less than three months of global demand coverage.WPIC research director Edward Sterck said the rally in platinum has been fundamentally rooted in shrinking stocks. “One of the motivating factors for the rally last year was the fact that above-ground stocks had fallen to unsustainably low levels,” he said, adding that it would take several years of large surpluses to rebuild inventories. The market is already showing signs of tightness through elevated lease rates and strong backwardation in over-the-counter forward markets, both classic indicators of near-term supply stress.
While higher prices may encourage some recycling, overall supply growth remains limited. WPIC forecasts mine supply will remain broadly flat in 2026 at 5.551 million ounces, with modest gains in South Africa offset by declines elsewhere. Recycling supply is expected to rise 9%, but operational and financial constraints continue to limit how quickly secondary supply can respond.
This means the overall supply picture remains tight not only for platinum, but also for several other PGMs. Rhodium, in particular, is facing exceptionally constrained conditions. Metals Focus forecasts that by 2026, rhodium inventories could fall below three months of demand coverage. Ruthenium is also expected to remain in short supply as rising demand linked to artificial intelligence and hard disk drives offsets weakness in the chemical sector.
Another major support for platinum has come from China. Metals Focus highlighted the launch of platinum futures on the Guangzhou Futures Exchange last year as a major development, calling it a structural shift in domestic price discovery and investor access.
The new futures market has helped expand the range of investors able to participate in platinum, with implications far beyond China. In effect, it has strengthened the metal’s financial market profile at a time when physical supply is already constrained.
WPIC expects total platinum demand to fall 9% in 2026 to 7.674 million ounces, but this is largely because the unusually large ETF and exchange stock inflows seen last year are unlikely to be repeated. That does not mean investor demand is weakening. On the contrary, physical investment demand remains strong, with bar and coin demand projected to rise 27% to 718,000 ounces, the highest level in six years. Sterck said platinum’s appeal increasingly overlaps with broader precious metals demand as investors look for alternatives to U.S. dollar-denominated assets. In his view, platinum may offer even stronger upside than gold in a hard-asset allocation environment because its market is much tighter.
Despite growing investor participation, automotive demand remains the core theme for the PGM complex. Metals Focus said global automotive demand for platinum, palladium and rhodium is expected to decline 2% in 2025 to 11.9 million ounces, the first time it has fallen below 12 million ounces since the 2022 semiconductor shortage.
Even so, the decline is relatively modest. WPIC forecasts that automotive platinum demand will slip only 2% to 2.959 million ounces, supported by growth in hybrid vehicles and heavy-duty vehicle demand in the United States and India. Stricter emissions rules are also helping sustain platinum use in autocatalysts, even as internal combustion engine production softens.
Palladium is a more mixed story. While Metals Focus expects a meaningful rebound in price next year, not all analysts are equally bullish. UBS, for example, has cut its long-term palladium forecast to $1,600 per ounce amid concerns about a potential supply overhang.
Industrial uses are becoming an increasingly important part of the platinum story. WPIC expects industrial platinum demand to rise 9% this year to 2.238 million ounces, led by a rebound in glass manufacturing capacity expansions.
At the same time, PGMs are benefiting from long-term demand linked to AI infrastructure. Sterck noted that platinum group metals are essential in the production of specialty crystals used in semiconductors, optical communications and data centers. He said China alone may have consumed 250,000 ounces of crucibles used in these applications last year. Although some of that metal is recyclable, the buildout of AI-related infrastructure is creating another layer of structural demand in an already undersupplied market. This trend is particularly supportive for ruthenium, which is seeing stronger demand from AI-related hard disk drive applications.
Taken together, the outlook for platinum group metals is increasingly compelling. Platinum leads the complex with a market defined by persistent deficits, low inventories, stronger physical investment demand, and growing strategic relevance across automotive, industrial, AI, and hydrogen applications. Rhodium and ruthenium also face exceptionally tight supply conditions, while iridium stands to benefit from broader PGM strength.
Although risks remain including weaker global growth, volatility in auto production, and uneven investor flows the balance of evidence suggests PGMs are moving into a period of structurally tighter markets and higher prices. In that environment, platinum group metals are no longer being driven solely by cyclical industrial demand. They are increasingly being revalued as scarce strategic materials and, in platinum’s case, as a credible precious-metal alternative in a more uncertain world.