On December 16, Russia’s top palladium producer released updated forecasts that paint a bullish picture for platinum and a relatively balanced outlook for palladium. For 2025, the platinum market is expected to experience a deficit of 300,000 ounces without factoring in investment demand. Once investment demand, such as bars, coins, ETFs, and exchange inventory movements, is included, the deficit balloons to 400,000 ounces. The situation for 2026 remains similarly constrained, with little improvement in supply projected.
By comparison, palladium appears more stable. The same Russian firm predicts a balanced palladium market in 2025 when excluding investment demand. Including this component, the market would show a deficit of around 200,000 ounces. Looking forward to 2026, the company sees a minor palladium deficit of 100,000 ounces.
These figures contrast sharply with the World Platinum Investment Council’s (WPIC) more moderate expectations. The WPIC suggested in its latest report that platinum may actually be oversupplied by approximately 380,000 ounces in 2026 when excluding investment activity. Nevertheless, they also acknowledge a structural deficit of 850,000 ounces for 2025, marking the third consecutive year of insufficient supply.
These tightening fundamentals have ignited investor enthusiasm, with platinum prices surging from $910 per ounce at the start of 2025 to a peak of $1,779 in mid-December, a 94% increase that outpaced even gold. Analysts from LiteFinance and technical expert Clive Maund describe platinum as a robust long-term play, largely due to its growing relevance in green technologies, tight mine supply, and renewed investor demand. Maund forecasts platinum to “soar,” potentially breaching $1,800 and beyond, with other analysts predicting prices to average around $1,770 by year-end 2025 and potentially reaching $2,340 in 2026.
The current landscape of platinum supply is facing several significant structural challenges. South Africa, which accounts for approximately 80% of global platinum production, is encountering ongoing production difficulties. Key issues include aging infrastructure, power supply constraints, and rising inflation affecting both labor and operational costs.
In addition, Russia, the world's second-largest platinum producer, is experiencing geopolitical instability and trade tensions, complicating its ability to export the metal effectively. Furthermore, efforts to expand production pipelines in both countries are hindered by a lack of capital and persistent political uncertainties.
Historically, recycling has played a vital role in mitigating supply disruptions; however, its effectiveness has notably declined over the past three years. Despite this setback, the World Platinum Investment Council (WPIC) remains optimistic about potential improvements. It is anticipated that recovery in the recycling sector could help alleviate some supply pressures starting in 2026, with a projected increase of 10%.
Platinum demand is experiencing a notable surge, with projections suggesting that total demand could close 2025 at nearly 8 million ounces. While automotive demand is facing competition from electric vehicles (EVs), it remains elevated compared to five-year averages, largely due to a slower-than-expected transition to EVs. In addition, industrial uses for platinum, particularly in chemicals and glass, are now rebounding.
Emerging areas such as green energy and hydrogen applications are also poised to become significant growth sectors for platinum. Around the world, jewelry demand is increasing year-over-year, especially in key markets like China, the U.S., Europe, and India. Investment demand for platinum, particularly in the form of coins and bars, is anticipated to rise nearly 50% year-over-year. This growth is bolstered by China's introduction of new platinum futures contracts and a strategic reclassification of the metal as a “critical mineral.”
Of particular note is the hydrogen economy, which is expected to play a transformative role in driving platinum demand. The metal is crucial for hydrogen production and utilization, finding applications in fuel-cell electric vehicles (FCEVs) and electrolyzers used for green hydrogen. The World Platinum Investment Council (WPIC) estimates that this sector alone could account for an additional 875,000 to 900,000 ounces of annual demand by 2030.
China’s recent policy moves could prove a game-changer. By classifying platinum as a critical mineral essential for national energy security and launching new futures on the Guangzhou Futures Exchange, Beijing has cemented its intent to secure long-term supplies. Since China relies on imports for 95% of its platinum consumption, these strategies not only enhance investment appeal but also elevate global demand, tightening the supply chain even further.
However, some analysts caution against unbridled optimism. High prices may prompt profit-taking among holders of exchange-traded funds (ETFs), which currently store about 3.2 Moz of platinum. Additionally, if geopolitical tensions ease or tariffs are lifted, some above-ground stockpiles could re-enter the market, temporarily relieving supply pressure.
Nonetheless, WPIC maintains that the overall platinum deficit will persist through 2029, albeit declining. They now project a deficit of 486,000 ounces in 2026, attributing the slight relief to a rebound in secondary supply and stable production levels.
Looking forward, the outlook for platinum remains bullish, with rising demand intersecting with persistent supply-side woes. The hydrogen transition, investment inflows, and evolving industrial applications all signal sustained interest in the precious metal. Although macroeconomic volatility and pricing corrections are possible, platinum’s dual role in green tech and wealth preservation suggests it may continue its rally into 2026 and well into the next decade.