WPIC: Platinum headed for fourth consecutive supply deficit

Platinum demand bright spots: industrials, bars and coins

Platinum demand in the first quarter of 2026 declined by 31 percent year-on-year. WPIC considers exchange traded funds (ETFs) and exchange stock outflows as the “single largest factor” in lower metal consumption.

The firm is forecasting a 9 percent decline in total platinum demand for 2026, to 7.674 million ounces. The industrial sector, and bars and coins represent the best growth segments for platinum demand this year.

automotive

The automotive industry is by far the largest demand segment (36 percent) for platinum as it is used in catalytic converters to reduce emissions from internal combustion engine (ICE) vehicles. Demand for platinum is falling due to the increasing adoption of electric vehicles, leading to a 6 percent year-on-year decline in automotive demand for the metal in the first quarter of the year.

For the full year, the decline is expected to come in at 2 percent, driven by supportive emissions rules requiring increased platinum use that are set to take hold in China, the US and Europe. Another factor contributing to the resilient demand picture in the automotive sector is the trend towards hybrid vehicles rather than pure electric and the growth in ICE heavy-duty vehicles in key markets such as the US and India.

jewelry

The jewelery industry is the second largest (26 per cent) demand segment for platinum. The sector is highly price sensitive, and rising platinum prices coupled with the rising cost of living over the past year have taken its toll. In the first quarter of 2026, demand for platinum jewelery declined by 13 per cent year-on-year.

“This decline was driven by multiple factors working together: higher platinum prices, weak consumer sentiment, continued stocking up in the jewelery supply chain and a shift in investment bars away from larger, semi-investment pieces,” WPIC said in its press release.

The biggest decline was seen in China with demand in that region falling by 42 percent during this period. A catalyst for this decline is the government’s removal of the 13 percent VAT exemption for platinum delivered through the Shanghai Gold Exchange as early as November 2025.

In comparison, the European platinum jewelery market is on track to reach another record high in demand in 2026, while India should see a growth of 5 per cent. However, this is not enough to counter the decline in other major markets including the US, Japan and China. Overall, analysts are projecting a 12 percent decline in demand from the global jewelery market in 2026.

industrial

The industrial sector is set to overtake jewelery from the second top position in 2026 due to increasing demand for platinum in glass, medical, electrical and hydrogen segments.

In the first quarter of 2026, industrial demand increased by 41 percent year-on-year. The biggest driver of this growth was the surge in the glass segment, which had seen a significant decline in demand due to the closure of several manufacturing plants in the same quarter last year.

Platinum is not used in glass itself, but its exceptional resistance to extreme heat, oxidation and chemical corrosion makes it ideal for use in fiberglass, optical glass, substrates used in AI technology components, and in the lining of equipment needed to manufacture flat panel display glass.

Weakness in industrial platinum demand in the first quarter of 2026 came from the chemical segment, which declined 4 percent, and the petroleum segment, which declined 28 percent year-on-year.

The WPIC report estimates that overall in 2026, industrial demand for platinum will grow 9 percent as glass demand is projected to grow 83 percent for the year. On the other hand, the petroleum segment is expected to decline by 28 percent this year as the US-Iran war has caused severe supply disruption to the oil sector.

investment

Investment demand for platinum products, whether physical bars and coins or ETFs, represents about 13 percent of total demand for the metal in 2025. Investors turned to platinum as a more affordable safe-haven investment option than gold last year, resulting in massive inflows into ETFs and record platinum prices.

However, Q1 2026 saw a strong reversal in that trend after the US-Iran breakout and fears of rising inflation and higher interest rates were triggered. Investors took profits and sold a total of 374,000 ounces of ETF holdings for a net divestment of 225,000 ounces of platinum.

WPIC says these ETF outflows were the key driver of the platinum market surplus of 268,000 ounces recorded in the first quarter of this year.

This doesn’t mean that investors have given up on platinum in 2026. Data from WPIC shows demand for platinum bars and coins in Q1 2026 increased 42 percent year-on-year, led by Asian markets.

“Platinum’s price performance in 2025 and strong levels in 2026 have drawn increased global attention to its investment potential,” said Raymond, CEO of WPIC. “A broad group of investors are now actively considering platinum’s valuable attributes as well as its attractive supply and demand fundamentals, as highlights of ETF demand through 2025 and this year’s expected bar and coin strength.”

For full year 2026, WPIC is projecting total platinum bar and coin investments to increase 27 percent to 718,000 ounces, with growth expected across all regions. If realized, it would be a six-year high for this demand segment.

However, analysts in the report are still projecting a 54 percent decline in total investment demand for platinum as the market readjusts its expectations for non-yield generating assets and demand for ETFs is expected to decline further.

Supply remains low in platinum market

With the first surplus recorded in six quarters and a projected 2026 deficit that is nearly 75 percent lower than last year, platinum’s supply side fundamentals could see a huge improvement.

However, WPIC notes that “the cumulative effect of four consecutive annual shortages has left the physical platinum market tight. Indeed, rebuilding above-ground stocks to sustainable levels will require a series of material market surpluses.”

Looking at the projected deficit for 2026, the platinum market is expecting overhead stocks of the metal to decrease by 1.747 million ounces by the end of this year, or less than three months of global demand.

my supplies

Platinum prices reached a record high in January 2026, and average prices for the metal increased nearly 100 percent in the first quarter of 2026 compared to the first quarter of 2025. However, this impressive price performance is not yet expected to translate into increased production from the world’s platinum mines.

“In South Africa, Ivanhoe’s Platreef mine represents the first greenfield project to come on stream since Styledrift in 2019, highlighting the challenges miners face in quickly reacting to prices,” the WPIC report said.

Platinum mine supplies in the first quarter of 2026 improved 22 percent year-on-year, although analysts expect mine supplies to remain flat for the full year at 5.551 million ounces.

Most major platinum producing regions such as Zimbabwe and Russia experienced declines in the first quarter. South Africa is the only bright spot in terms of growth in refined output, which has increased by 41 percent year-on-year. This is primarily due to Valterra Platinum returning to normal production following flood disruptions in 2025 and the company’s decision to move its planned maintenance downtime from the usual first quarter timing to later in the year.

recycling

Platinum recycling is expected to be a major driver of the projected 2 percent increase in total platinum supply to 2026.

This segment of the market benefited greatly from high prices and favorable government policies in the first quarter of the year, especially in the western regions. All told, supplies from this segment increased 7 percent year-over-year to 416,000 ounces.

Analysts expect this trend to continue with recycling increasing by 9 percent to 1.826 million ounces in 2026 as higher platinum prices encourage the processing of used autocatalyst and jewelery scrap.

However, there are reports that scrapyards are recycling low grade catalysts sitting in their stockpiles that were previously uneconomic to recycle at low prices. “The fact that the recycling supply chain is drawing on inventory and yet recycling supply is failing to meet expectations raises the question whether the strong three- to five-year outlook for recycling supply growth may actually fall short of expectations,” said the authors of WPIC Platinum Quarterly.

Investor Takeaway

The investment case for platinum as both a precious metal and an industrial metal is strong in 2026. Despite the first quarter’s surplus, the platinum market is still headed for its fourth consecutive annual deficit, with ground stocks expected to be less than three months short of global demand by the end of 2026.

The WPIC emphasizes that a series of large surpluses will be required to bring physical stocks back to sustainable levels, maintaining a tight market picture that could translate into stronger prices for the metal.