The global platinum market is experiencing its third consecutive year of supply deficits, though the shortfall for 2025 has been revised downwards by the World Platinum Investment Council (WPIC).
The deficit is now projected at 850,000 ounces, a significant figure but less than the 968,000-ounce deficit seen last year.
At the time of writing, the most-active platinum contract on COMEX was at $1,398.35 per ounce, down 0.1% from the previous close.
Prices of both platinum and palladium have risen significantly over the last few weeks, tracking gold’s rally.
Gold prices have enjoyed a blockbuster run in 2025 so far, with prices jumping more than 40%. The yellow metal has hit a series of record highs and recently breached the $3,700 per ounce.
Factors influencing the revision
The primary reasons for this downward revision are a slightly higher-than-anticipated recycling supply and weaker industrial demand.
“Industrial demand is expected to hit an eight-year low, largely due to a significant drop from the glass industry,” noted Carsten Fritsch, commodity analyst at Commerzbank AG.
This decline could not be fully offset by a surge in jewelry demand, particularly from China in the second quarter, which is pushing jewelry demand to a seven-year high.
Minor adjustments in automotive demand and investment demand largely balanced each other out.
The uptick in investment demand is attributed to robust interest in platinum bars and coins. Interestingly, this year’s expected ETF demand has been confirmed, a surprising development given the strong outflows from ETFs since May.
Mine supply continues to decline
The forecast for mine supply remains unchanged, with expectations of a nearly 6% year-on-year decrease, reaching a five-year low.
This indicates that the recent significant increase in platinum prices has not yet stimulated new production.
“The WPIC highlights the multi-year time lag between the development of mining projects and the commencement of production,” Fritsch added.
However, it’s worth considering that recently decommissioned shafts from existing mines could potentially be brought back online.
Above-ground stocks and market outlook
Above-ground platinum stocks are now predicted to fall to just under 3 million ounces this year.
This is a substantial revision from the previous forecast, which was about 800,000 ounces lower.
This new projection implies that another year with a supply deficit of similar magnitude would be needed for stocks to reach the level previously expected.
Fritsch noted:
Despite three consecutive years of supply deficits, the platinum market isn’t quite as tight as initially believed.
Price forecasts updated
Commerzbank AG has adjusted its platinum price forecast for the end of 2025 upwards to $1,400 per troy ounce, an increase from the previous $1,350 per ounce.
This revision reflects the current higher price level and an updated gold price forecast.
The year-end forecast for 2026 remains confirmed at $1,500.
Price forecasts for palladium are holding steady at $1,200 for the end of 2025 and $1,300 for the end of 2026.
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