The World Platinum Investment Council (WPIC) has forecasted a deepening platinum deficit in 2025, attributing it to a decline in supply from the recycling sector and reduced output from South African mines. Despite a 5% decrease in demand, this year’s deficit of 848,000 troy ounces is expected to surpass the previous year’s shortfall, although it will be smaller than 2024’s deficit of 995,000 ounces.

The WPIC, representing major Western platinum producers, had initially projected a deficit of 539,000 ounces for 2025 and 682,000 ounces for 2024. Factors contributing to the deficit include inflows into physically backed platinum exchange-traded funds driven by increasing gold prices and Comex exchange stocks due to concerns over US tariffs, which have bolstered platinum investments.

Demand from the automotive sector, a significant consumer of platinum for catalytic converters to reduce emissions, is anticipated to decrease by 1% to 3.1 million ounces this year. A key factor influencing the revised deficit estimate is a 278,000-ounce downward adjustment in the recycling forecast for this year, as market improvements are not expected in the near future.

Global platinum recycling declined by 1% in 2024 and is projected to see only marginal growth in 2025 due to limitations in the supply of spent autocatalysts and reductions in jewelry recycling. To offset the deficit, above-ground platinum stocks are projected to decrease by 25% to 2.5 million ounces, equivalent to less than four months of global demand.

The current platinum market dynamics highlight the challenges posed by supply constraints and fluctuating demand, underscoring the need for sustainable solutions to address the widening deficit. The WPIC’s latest report underscores the delicate balance between supply and demand in the platinum industry and the importance of strategic planning to ensure the long-term stability of the market.

In conclusion, the projected platinum deficit for 2025 underscores the critical need for proactive measures to address supply chain disruptions and support sustainable practices in the platinum sector to mitigate the widening gap between supply and demand. The evolving market conditions necessitate a collaborative effort from industry stakeholders to navigate the challenges and opportunities presented by the changing landscape of the platinum market.