A 75% price rise since the beginning of the year by platinum as it has outperformed gold might be coming to an end as a multi-year supply deficit of the metal morphs into a modest surplus next year.
The flip from a forecast 692,000-ounce shortfall this year is tipped by the World Platinum Investment Council to be replaced by a 20,000oz surplus next year and while technically described as a balanced market the change will affect investor sentiment.
Platinum bars ingots background.
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Long seen, like silver, as a precious metal substitute for gold, platinum and its sister metal palladium, have extensive industrial uses, including in jewelry and as catalysts to remove noxious gases from the exhausts of internal combustion engines (ICE).
The increasing popularity of electric cars had been expected to dampen the catalyst market but that’s been a slow-moving event as consumers prove to be slower than expected to embrace EVs with many car buyers preferring the half-way house of hybrid engine technology which solves the problem of range anxiety.
Significantly, hybrid engines require a heavier coating of platinum than a conventional ICE vehicle.
But most of the heavy lifting in the platinum price rise from $932/oz in early January to latest sales at $1637/oz has been a direct result of investors looking for a cheaper entry into the precious metals sector, which essentially means choosing silver, platinum or palladium.
Poor Man’s Metals
Silver, long derided as the poor man’s gold, has been slightly stronger than platinum with a 77% rise since the start of the year. Palladium is up 61%, also ahead of gold which has risen by 60% this year, building on three earlier years of increases which have seen the king of precious metals rise by 155% since mid-2022.
The test for platinum, which has enjoyed the twin benefits of constrained South African supply, its major producer, and growing investment and industrial demand, is what comes next and that looks to be a return to neutral market conditions.
The WPIC said in its third quarter report earlier this month that “after three years of deep deficits, platinum markets are expected to be more balanced in 2026”.
The platinum price could be under pressure as a big supply shortfall flips into a small surplus.
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The deficit years of 2023, ‘24 and this year, have eaten into a large above ground stockpile which stood at 5.5 million ounces in 2022 but is now estimated to stand at 3.2m/oz.
The WPIC said this year’s forecast deficit of 692,000oz was the equivalent of 9% of annual demand while a surge in supply from processing spent auto catalysts and the sale of scrap metal and jewelry, would see a supply increase of 4% in 2026.
The speed at which the platinum price rose over the last eight months, almost certainly driven by investors chasing a gold substitute, is a pointer to what might happen next year as underlying supply/demand fundamentals reverse.
At its latest price, platinum is at a 12-year high but short of its all-time high of $2038/oz set in mid-2008, a time when platinum was more than double the price of gold which was selling for around $912/oz at that time.
London-listed Valterra Platinum, which was spun out of Anglo American is a most closely follow platinum miner.
Previously trading as Anglo American Platinum, Valterra’s share price has closely tracked the platinum price, up 73% since the start of the year.
Source: https://www.forbes.com/sites/timtreadgold/2025/11/28/platinum-on-edge-as-a-long-term-deficit-flips-to-surplus/
