Platinum group metals (PGMs) are entering a new phase of strength, with platinum and rhodium expected to deliver some of the biggest gains in the precious metals space as persistent supply deficits, shrinking inventories, and renewed investor demand reshape the market.
According to consultancy Metals Focus, platinum prices are forecast to average $2,190 an ounce in 2026, a 71% year-on-year increase, while rhodium is expected to climb 62% to $10,200 an ounce. Palladium is projected to rise 37% to $1,570, with other PGMs also posting major gains: iridium is expected to increase 64% to $7,200, and ruthenium could more than double to $1,560 an ounce.
The outlook reflects what analysts describe as a decisive break from the range-bound trading that dominated the PGM complex for years. After several years of weak prices and compressed mining margins, 2025 marked a turning point. The basket price of PGMs used primarily in vehicle exhaust systems to reduce harmful emissions rose sharply, improving profitability for producers after three difficult years. Metals Focus said the recovery was driven by a combination of structural supply shortages, tighter physical availability, investor inflows into physical assets, and regional dislocations linked to tariff concerns and strategic stockpiling.“Aside from the Covid pandemic, when we saw sporadic breakouts in these metals, the entire complex has effectively shifted higher,” said Wilma Swarts, Director of PGMs at Metals Focus. She added that the impact of electric vehicles displacing PGM demand has so far been “less dramatic than expected.”
Among the PGMs, platinum has become the clearest leader. Analysts say its appeal lies in its broader demand base, which extends beyond automotive use into jewelry, industrial applications, investment products and emerging hydrogen technologies. Platinum has also benefited from a stronger correlation with gold, making it increasingly attractive as a hard-asset investment during periods of geopolitical and financial uncertainty.
Metals Focus expects the platinum market to record its fourth consecutive annual deficit in 2026, with a shortfall of 312,000 ounces. The World Platinum Investment Council (WPIC) sees a similarly tight picture, forecasting a 297,000-ounce deficit and above-ground stocks falling to just 1.747 million ounces by year-end, less than three months of global demand.
“What has changed markedly is the investor story,” Swarts said. “Platinum’s re-rating last year was driven as much by strategic accumulation and correlation with gold, as by physical fundamentals and tighter available stock levels.” WPIC CEO Trevor Raymond said platinum’s fundamentals remain attractive because the market remains undersupplied despite geopolitical volatility. WPIC research director Edward Sterck added that unsustainably low above-ground inventories have supported the rally.“One of the motivating factors for the rally last year was the fact that above-ground stocks had fallen to unsustainably low levels,” Sterck said. “We’d really have to see several years of significant surpluses to restock those above-ground stocks.”
A key pillar of the bullish outlook is the inability of supply to respond quickly. Metals Focus expects total mine output across the PGM complex to fall another 2.2% in 2026 to 13.9 million ounces, following disruptions in major producing regions.
South African mines, the backbone of global PGM supply, have been slow to recover after severe flooding in 2025, while North American output has also weakened. Palladium supply in particular has been hit by the placement of the Stillwater West mine in the United States on care and maintenance.
Although secondary supply is expected to improve, especially through stronger recycling of autocatalysts, analysts do not believe it will be enough to offset falling mine production. Recycling of platinum, palladium and rhodium from autocatalysts is projected to rise 11% to 4.4 million ounces in 2026, supported by Chinese scrappage programs and domestic refining incentives. Still, years of structural deficits have left the market tight, a condition clearly visible in elevated London lease rates. Those rates remain high even after the extreme spikes seen in 2025, when tariff fears triggered large movements of metal from London to U.S. inventories.
While battery electric vehicle adoption has weighed on the long-term outlook for automotive catalyst demand, the erosion has been slower than many expected. Internal combustion engine and hybrid vehicles still dominate global production, supporting continued use of platinum, palladium and rhodium in emissions control systems. Metals Focus said global automotive demand for these three PGMs fell 2% in 2025 to 11.9 million ounces, the first time it slipped below 12 million ounces since the semiconductor shortages of 2022. Even so, automotive demand remains a central source of consumption.WPIC expects automotive platinum demand to decline by only 2% in 2026 to 2.959 million ounces, supported by growth in hybrid vehicles and demand for heavy-duty vehicles in markets such as the United States and India. At the same time, non-automotive demand is becoming increasingly important.
Platinum jewelry demand rose 10% in 2025 to 2.2 million ounces, a nine-year high, as both consumers and manufacturers shifted away from expensive gold. Electronics demand across the PGM complex climbed 8% to 1.3 million ounces, helped by rapid expansion in artificial intelligence infrastructure, semiconductors and data storage technologies. Hydrogen-related demand also surged. Metals Focus said consumption tied to the hydrogen sector jumped 76% in 2025 to 97,000 ounces as governments and corporations expanded commitments to hydrogen production, fuel cells and broader clean-energy systems. Sterck said this could become a major source of future platinum demand as countries prioritize energy security and industrial decarbonization. “You can’t electrify everything,” he said. “You can’t reduce steel with electricity, and you can’t produce fertilizer or ammonia with electricity; you need hydrogen.”
Another emerging source of support for PGMs is the buildout of artificial intelligence infrastructure. Platinum group metals are essential in the production of specialty crystals used in semiconductors, optical communications and data centers.“These data centers can’t exist with current technology without platinum and the rest of the PGM complex,” Sterck said, noting that China alone may have consumed around 250,000 ounces last year for crucibles used in this manufacturing chain. Industrial demand for platinum is expected to remain robust. WPIC forecasts industrial demand will rise 9% this year to 2.238 million ounces, led by a rebound in glass manufacturing capacity expansions. Although some of the metal used in these applications is recyclable, the broader buildout of AI-related infrastructure adds another layer of structural demand to an already undersupplied market.
The bullish case extends beyond platinum. Rhodium markets remain especially tight, with Metals Focus warning that above-ground stocks could fall below three months of demand cover in 2026. Ruthenium is also expected to remain in deficit, supported by demand linked to AI-related hard disk drive production even as chemical-sector consumption softens.
Prices across the complex have already risen sharply from year-ago levels. Even after retreating from multi-year highs reached in early 2026, following the fading of a gold-led rally and weaker investment sentiment tied to the war in Iran, PGM prices remain dramatically elevated. Platinum is still up 110% from a year ago, palladium up 51%, rhodium up 83%, and ruthenium up 158%.
Another critical theme highlighted by Metals Focus is the increasing regionalization of PGM markets. Policies such as the U.S. Section 232 proclamation, China’s 15th Five-Year Plan, and the European Union’s Critical Raw Materials Act are changing how supply chains function and how prices are discovered. The launch of platinum and palladium futures on China’s Guangzhou Futures Exchange (GFEX) has been particularly important, creating a new channel for domestic investor participation and strategic accumulation. Analysts say this marks a structural shift in global PGM price formation.
Geopolitical tensions, including fears of a prolonged U.S.-Iran conflict, are also encouraging safe-haven buying and stockpiling of physical metal. In that environment, platinum has increasingly been viewed not just as an industrial metal, but also as an investment asset with leverage to broader precious-metals trends. “If you look at the precious metal complex, platinum is the metal with the tighter market dynamics,” Sterck said. “It offers the greatest leverage to a scenario where people are looking for alternative investments to the U.S. dollar.”
The rebound in prices has brought relief to miners. After three consecutive years of declines, the PGM basket price jumped 28% in 2025. Despite rising production costs in South Africa and Russia, this was enough to more than double all-in sustaining cost margins to a three-year high, according to Metals Focus. Even so, the consultancy cautions that the sector has a limited ability to increase output quickly. New production takes years to develop, and the current tightness is unlikely to be resolved in the near term. That mismatch of stronger prices and margins on one side, but slow supply responsiveness on the other, is a major reason analysts believe the PGM rally has further room to run.
Although platinum prices have consolidated in recent months and remain below the highs reached earlier this year, both Metals Focus and the WPIC argue that the underlying bull case remains intact. Supply remains constrained, inventories are falling, and demand, while evolving, is proving more resilient than many had anticipated. With investment flows playing a larger role, and with platinum offering a mix of industrial utility and precious-metals appeal, the market may still be in the early stages of a broader repricing.“I don’t think investors are focused on price levels right now,” Sterck said. “They’re looking for trends.”For now, the trend across the PGM complex is clear: persistent deficits, tightening physical markets and rising strategic demand are creating the conditions for another year of strong gains, with platinum firmly at the center of the story.