The platinum group metals (PGM) market is entering another year of tight supply, with platinum once again expected to post a deficit as firm industrial demand collides with constrained mine output and only a partial recovery in recycling. According to Johnson Matthey’s latest PGM Market Report, platinum demand is set to exceed supply again this year. At the same time, ruthenium and iridium are also forecast to remain in deficit due to rising demand from data storage and energy transition applications. Palladium and rhodium, by contrast, are expected to shift into small surpluses.
Johnson Matthey said the PGM complex broadly experienced deficits in 2025, particularly among the three autocatalyst metals platinum, palladium and rhodium as supply remained weak. Autocatalyst recycling has been slow to recover following the downturn in 2023/24, while mine closures, rationalization and operational pressures have reduced primary production in key regions such as South Africa and North America. At the same time, demand has held up better than many expected. Industrial consumption has remained robust, especially in petrochemicals and electronics, while internal combustion engine (ICE) vehicle production has proven resilient despite substitution, thrifting and shifts in vehicle mix.
Johnson Matthey estimates that platinum recorded a deficit of 951,000 oz in 2025, widening from 559,000 oz in 2024. For this year, the platinum deficit is forecast at 317,000 oz. Palladium registered a 416,000 oz deficit in 2025, compared with 218,000 oz in 2024, but is expected to move into a 214,000 oz surplus this year. Rhodium posted a 50,000 oz deficit in 2025, widening from just 9,000 oz in 2024, before also returning to a modest 15,000 oz surplus this year. The broader outlook remains uncertain. Johnson Matthey warns that ongoing conflict in the Middle East, unresolved US trade policy and growing resource nationalism all add risk to near-term PGM demand. Its forecast suggests demand for all PGMs except iridium could contract in 2026 as lower global ICE vehicle output weighs on automotive consumption and jewelry and investment demand softens. Ruthenium chemical demand is expected to decline, though industrial use of PGMs should otherwise remain broadly stable, subject to downside risk from disruptions to petrochemical shipments.
On the supply side, Johnson Matthey expects mine production to decline again, especially in Russia, even as double-digit growth in autocatalyst recycling boosts secondary supply. South African output is likely to ease modestly as the temporary boost from the release of work-in-progress fades and mine production volumes contract slightly. Russian supply is expected to fall sharply as Norilsk Nickel adjusts its mining mix. In North America, platinum supply may rise slightly, but palladium output is likely to weaken as Canada’s Lac des Iles mine approaches the end of its life. Separate figures from the World Platinum Investment Council (WPIC) reinforce the picture of a structurally tight platinum market. WPIC confirmed a 1.082-million-ounce platinum deficit in 2025, the fourth consecutive annual deficit since 2022, and the deepest recorded in its data series going back to 2014. It expects another deficit in 2026, with forecasts ranging from about 240,000 oz to 297,000 oz depending on the reporting period.
These repeated shortfalls have significantly eroded above-ground inventories, leaving only around four months of demand coverage. That matters because once inventories fall below this level, the platinum price tends to become much more sensitive to operational disruptions than to routine demand fluctuations.
WPIC data show total platinum mine supply fell 5% year-on-year in 2025 to 5.51 million ounces, around 10% below the pre-COVID-19 five-year average. Its 2026 base case assumes essentially flat mine output, with only a marginal increase in total supply driven by stronger recycling rather than by new primary production. That inelasticity is especially visible in South Africa, which remains the world’s dominant platinum-producing region. South African primary platinum output has fallen from about 5.3 million ounces in 2006 to roughly 3.9 million ounces in 2025, despite the platinum price having doubled over the past year. Producers continue to face sharply rising operating costs, including electricity costs that have climbed 60% between 2021 and 2026. Logistics and energy security risks have also risen, with 60% of South Africa’s diesel imports passing through the Strait of Hormuz, making the sector vulnerable to disruptions in Middle Eastern shipping.
Nick Smart, CEO of ValOre Metals, summed up the supply challenge by noting that primary platinum production has fallen from more than 6 million ounces in 2021 to about 5.5 million ounces this year, despite a doubling in the platinum price. That, he said, highlights both the inelasticity of supply and the difficulty of bringing new metal to market.
Although the WPIC reported an oversupply of platinum in the first quarter of this year due to an 18% jump in supply, particularly from South Africa, it said that trend would not continue through the rest of the year. Full-year supply is expected to be only about 2% higher than in 2025, even after accounting for increased recycling. As a result, the market is still on track for a fourth consecutive annual deficit. Demand trends are mixed but still constructive for platinum. Investor redemptions from ETFs and exchange-traded stocks are expected this year as tariff-related fears fade and some investors take profits after the price rally. However, these outflows are relatively modest in absolute terms. Meanwhile, bar and coin demand remains supportive, and growing investor interest in platinum as both a precious and industrial metal has strengthened sentiment.
Automotive demand, which is especially important for palladium and rhodium but still a major component of platinum consumption, fell 6% in the first quarter to 720,000 oz. For the full year, however, the decline is expected to moderate to about 2% (2.96 million oz). Policy adjustments in Canada and Europe have also extended the life of ICE vehicles, while hybrids are emerging as an important source of platinum demand. WPIC expects an 8% drop in light-duty ICE production to be partly offset by a 12% increase in hybrid output, with additional support from heavy-duty ICE demand in India and the US. Ed Sterck, WPIC’s director of research, said the market remains constructive because supply is constrained, recycling is only gradually recovering, and demand remains largely price-inelastic.
The tightening fundamentals are feeding into stronger price expectations. Bank of America Global Research has raised its 2026 platinum price forecast to $2,450/oz from $1,825/oz earlier in the year, citing persistent deficits and trade-related supply dislocations that are keeping the market structurally tight. The platinum price has already doubled since May last year, though it has softened slightly over the past month. Analysts remain positive on the long-term outlook, even as broader commodity market attention has recently shifted toward oil amid escalating tensions in the Middle East.
Trevor Raymond, CEO of the WPIC, said platinum’s strong 2025 price performance and robust levels this year have significantly increased global attention on its investment case. A broader range of investors, he said, is now looking at platinum for both its precious-metal attributes and its compelling supply-and-demand fundamentals.
The sustained deficits and shrinking inventory buffers are also drawing attention to development-stage PGM assets outside South Africa. Companies with demonstrated recoveries above 70% at the bench scale and economic studies targeted for late 2026 are trading at significant enterprise value-per-ounce discounts relative to peers with similar resource scale.ValOre Metals’ Pedra Branca project in Brazil is one example. The project hosts an inferred 2.198 million ounce 2PGE+Au resource across 63.6 million tonnes at 1.08 g/t, spread over seven near-surface zones. Around 30% of the resource lies in weathered material targeted for bioleaching, while a smaller, higher-grade chromitite component grades between 6.4 g/t and 8.5 g/t 2PGE+Au. With a market capitalization of roughly C$26 million, Pedra Branca has been highlighted as trading at a substantial discount to comparable PGM developers.
Taken together, the latest data from Johnson Matthey and WPIC point to a platinum market that remains structurally undersupplied even if quarter-to-quarter fluctuations create temporary periods of surplus. Supply growth remains limited, especially from primary mining, while industrial demand, automotive usage and investor interest continue to provide underlying support. Palladium and rhodium may move into modest surpluses this year, but platinum appears set to remain the standout tight market in the PGM basket. With inventories now thin, supply disruptions carrying greater price impact, and little evidence of a strong mine supply response despite much higher prices, the medium-term outlook for platinum remains notably bullish.