Platinum market faces deepening deficit as supply falls and demand holds firm
Despite various uncertainties posed by geopolitical issues, the global platinum market remains in structural deficit according to a new report from the World Platinum Investment Council (WPIC).
Global demand in the first quarter of 2025 recorded a 10% year-on-year increase to 2,274,000 ounces.
According to the WPIC, a sharp rise in exchange-held platinum stocks drove most of that growth, as tariff-related uncertainty and a widening location premium encouraged higher metal inflows into the US.
Degree of resilience
The WPIC’s latest market update found that platinum’s diversity of demand had provided a significant degree of resilience even as the US government’s new approach to tariff policy starts to take effect.
On the positive side, global platinum jewellery popularity is on the rise on the back of a jump in Chinese platinum jewellery demand, driving a forecast 5% increase this year.
At the same time, many analysts recognise that platinum mine supply continues to face downside risks.
Auto market demand
While demand for the precious metal from the automotive market is holding firm, the WPIC is forecasting an overall reduction in demand of 2% for 2025.
The WPIC said a deficit in the availability of platinum is looming after total supply fell 10% to 1,458,000oz, due to a seasonally weak mine production quarter that a modest year-on-year recovery in recycling could not fully offset.
This resulted in a Q1 2025 deficit of 816,000oz, the largest single quarterly deficit in six years.
Mining supply slides
Total mining supply fell 13% year-on-year to 1,086,000oz in the first quarter—the lowest quarterly output since Q2 2020, according to the WPIC.
South Africa accounted for the bulk of the decline, experiencing unusually intense rainfall during the quarter, leading to a 10% year-on-year drop in refined output to 715,000oz.
The WPIC believes the supply decline will remain a major theme for all of 2025, forecasting a 4% year-on-year drop in total supply to 6,999,000oz.
While the WPIC sees demand falling by 4% to 7,965,000oz in 2025, that figure is still 115,000oz above its previous forecast, deepening to 966,000oz the third successive annual deficit.