Investors should expect to see significant and entrenched structural supply deficits in the platinum market for the foreseeable future as recycling and mine production cannot keep up with solid consumption, according to the latest report from the World Platinum Investment Council.
The platinum market is expected to see a supply deficit of 848,000 ounces this year, compared to last year’s deficit of nearly one million ounces, the WPIC said on Wednesday in its quarterly and 2024 year-end demand trends report. This is the third year the platinum market has recorded a significant deficit.
Edward Sterck, Director of Research at the WPIC, said that for him, the biggest surprise in current market dynamics is how the lack of recycling has impacted platinum supplies.
“Platinum supply is expected to shrink by 4% year-on-year to 7,002 koz, the second lowest number in our time series from 2013. Automotive recycling remains extremely weak due to an ongoing shortage of end-of-life catalytic converters, with total recycling at 1,496 koz, only 10 koz higher than the 12-year low seen in 2024,” the analysts said in the report.
Looking at platinum supply, mine production rose by 3% year-on-year to 5,766 koz, driven by stronger-than-expected output from South Africa and Russia. However, this year, mine production is expected to drop by 5%.
“Downside risks, such as the persistently low platinum group metal (PGM) basket price that has resulted in significant restructuring, remain,” the analysts said in the report.
Putting the supply and demand outlook into perspective, Sterck said that automotive demand would have to fall more than 30% to match dwindling supplies.
The automotive sector represents 80% of global platinum demand. The precious metal is a key component in autocatalytic converters, which are needed to reduce harmful emissions from internal combustion engines.
For 2025 demand, the WPIC said that automotive sector demand is expected to remain fairly stable this year, totaling 3.102 million ounces, down slightly from 3.12 million reported in 2024.
The report noted that industrial demand fell just under 1% year-on-year to 2.462 million ounces.
“Gains in the glass, medical, electrical, and hydrogen sectors could not outweigh a 26% decline in the chemical sector, as strategic capacity expansions in China’s petrochemical industry, that occurred primarily between 2019 and 2023, concluded.
This year, analysts are expecting industrial demand to fall 14% to 2,116 koz largely due to an anticipated tapering in the cyclical fiberglass capacity expansions last year.
However, the report noted that jewelry demand was a key pillar of strength in 2024. The report said that jewelry consumption increased 8% year-on-year to 1,993 koz last year.
Sterck said that jewelry demand is a key growth sector for platinum as its market share has dwindled over the years as its premium to gold dropped.
“Jewelry demand represents only about 25% of total demand at the moment, but it’s important to remember that it used to be 1.6 million ounces higher than it is today,” he said.
The report said that in 2025, jewelry demand is set to reach 2.027 million, an increase of 2% from last year. This will be the first time consumption exceeds 2 Moz since 2019. Demand will be driven by 5% and 7% growth anticipated in China and India, respectively; meanwhile, European and North American demand is expected to reach new record highs.
Another important sector remains investment demand. The report said investment demand increased 77% year-on-year to 702 koz in 2024.
“Significant investment inflows in the final quarter helped to boost this performance, as precious metals markets responded to the volatility caused by uncertainty over the implementation of US tariffs,” the analysts said.
Looking at 2025, the WPIC said that investment demand is expected to remain elevated at 606 koz, albeit 14% lower compared to last year.
“Bar and coin demand will soften further, despite improvements in Europe and North America (where the market will return to growth) and ongoing growth in China across all categories, as net bar and coin liquidations in Japan erode gains elsewhere,” the analysts said.
