The World Platinum Investment Council is projecting a deficit of 848,000 ounces in the platinum market for 2025, following shortages in the previous two years. The deficit in 2024 was nearly 1 million ounces, with a significant increase in the final quarter driven by investment demand triggered by political events.
Edward Sterck, the WPIC Director of Research, highlighted that the deficit in Q4 2024 deepened due to weaker recycling supply and increased investment demand, surpassing the council’s previous forecast. The quarter witnessed substantial demand uptake from various sources including platinum bar and coin purchases, ETF inflows, and exchange stocks movement.
The potential impact of US tariffs on Mexico and Canada could affect platinum investors and the auto industry, as these countries play a significant role in North American auto manufacturing. The fear is that increased costs due to tariffs may reduce demand, affecting platinum group metals used in automobile parts, particularly catalytic converters.
Despite policy uncertainties, the US administration’s potential rollback on environmental commitments could support platinum demand for internal combustion engines. Factors such as slowing growth in electric vehicles and backlash against specific automakers contribute to consumer preferences for vehicles requiring PGMs.
On the supply side, mining supply contraction continues, influenced by lower prices for other metals like palladium and rhodium. This restructuring for profitability has led to a significant drop in output, although platinum stockpiles entering the market in 2024 masked the impact. Recycling supply is expected to remain below the 10-year average due to various factors impacting end-of-life vehicle supplies.
In 2025, the platinum market is forecasted to maintain structural deficits, with investment demand expected to be high compared to previous years. Despite price ranges narrowing, there is anticipation for a breakout in prices, with potential positive outcomes. The market conditions suggest a positive direction, but the outcome remains uncertain.
Overall, the platinum market outlook for 2025 is dynamic and influenced by various economic, political, and industry-related factors. The interplay between supply, demand, and external influences will shape the market’s trajectory in the coming year.
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