n 2025, platinum prices rose significantly. Looking ahead to Q1 2026, if exchange inventories begin orderly restocking, leasing rates retreat from elevated levels, and ETF outflows remain manageable, platinum prices may consolidate within a range to digest 2025's gains. Conversely, if inventory restocking slows, leasing rates persist at high levels, and supply disruptions or unforeseen events hinder cross-regional allocation, upward price risks remain significant.

In 2025, NYMEX platinum futures prices surged significantly, closing the year at $2,070 per ounce, representing an annual increase of approximately 127%.

The substantial rise in platinum prices during 2025 resulted from the combined effect of bullish factors including structural supply tightness, cross-regional inventory shifts, and macroeconomic conditions.

First, a substantial supply deficit persists in the supply-demand dynamics. The supply-demand balance sheet indicates a global platinum market deficit of 692,000 ounces in 2025, accounting for approximately 9% of annual demand. Total supply declines by 2% year-on-year to 7.129 million ounces, with mine supply decreasing by 5%. Although recycled supply increases by 7% due to high prices, it remains insufficient to offset the decline in mine supply. Total demand is projected to decline by 5% to 7.821 million ounces. The cyclical weakening of industrial demand is the primary driver of this decline. However, against a backdrop of weaker supply and tighter inventories, price sensitivity to demand weakness is relatively low.

Second, signals regarding physical availability and financing costs were significantly amplified in 2025, reinforcing scarcity premiums. Data indicates that the average one-month implied rental rate for London Platinum in Q3 2025 reached approximately 15%, a sharp increase from around 10% in Q2 and roughly 1% in 2024, indicating a rapid rise in the cost of borrowing physical metal. Assuming leasing demand did not expand synchronously, higher leasing rates typically correspond to reduced available spot supply or reluctance among holders to lend at prevailing rates, thereby contracting circulating inventories. Concurrently, platinum's cross-regional flows exhibited phased, directional characteristics in 2025: inflows into NYMEX warehouses during Q1, increased Chinese imports coupled with NYMEX outflows in Q2, and substantial reinflows into NYMEX warehouses in Q3. This inventory migration reduces the effectiveness of globally available inventory and amplifies price sensitivity to policy uncertainties and delivery chain disruptions.

Finally, precious metals exhibit overall strength in 2025. Platinum and other platinum group metals, being relatively niche commodities, experience amplified price elasticity during capital reallocation. Benefiting from a weakening U.S. dollar, precious metal prices surge significantly in Q3 2025, with platinum prices rising in tandem. Macro-financial conditions provide the trend's “direction,” but the supply gap remains the decisive factor determining the trend's slope.

Entering 2026, market focus shifts to whether inventory and recycling mechanisms can spontaneously close the supply gap. Under the supply-demand balance sheet methodology of authoritative institutions, the platinum market is projected to transition from a 692,000-ounce supply deficit in 2025 to near equilibrium in 2026, with a surplus of approximately 20,000 ounces. Total supply is expected to grow by 4% year-on-year; while total demand is projected to decline by 6% year-on-year to 7.385 million ounces. It is important to note that this slight surplus is predicated on high prices stimulating inventory releases and does not equate to a relaxed physical market.

Entering 2026, market focus shifts to whether the supply gap can be spontaneously repaired by inventory and recycling mechanisms. According to the supply-demand balance sheet methodology of authoritative institutions, the platinum market is projected to transition from a 692,000-ounce supply deficit in 2025 to near equilibrium in 2026, with an estimated surplus of approximately 20,000 ounces. Total supply is expected to grow by 4% year-on-year, Total demand is projected to decline by 6% year-on-year to 7.385 million ounces. It is important to note that this modest surplus is predicated on high prices stimulating inventory releases and does not equate to a relaxed spot market.

Supply-side variables primarily center on elastic supply from mining and recycling. On the mining front, mine supply is projected to grow by only 2% year-on-year in 2026, with incremental supply primarily stemming from the release of work-in-progress (WIP) rather than new capacity additions. This limits the sensitivity of short-to-medium-term supply to price fluctuations. Regarding recycling, recycled supply is expected to increase by 10% year-on-year in 2026, becoming one of the key sources of supply growth. The realization of recycling elasticity hinges on two prerequisites: First, prices must remain at levels sufficient to cover the recycling chain's costs and incentivize households or channels to dispose of scrap materials. Second, there should be no structural constraints on the recoverable quantities of spent catalysts and scrap jewelry.

High supply concentration implies difficulty in dispersing disruption risks. According to the U.S. Geological Survey (USGS), global platinum mine production in 2024 totaled approximately 170 tons, with South Africa accounting for about 120 tons, Russia around 18 tons, and Zimbabwe roughly 19 tons. Global reserves are highly concentrated in a few regions like South Africa. Under this structure, disruptions in power supply, labor relations, transportation capacity, and geopolitical tensions could all impact international market prices through the chain: reduced deliverable metal → increased leasing rates → rising spot premiums.

Demand stems from four major sectors: industrial, automotive, jewelry, and investment. The projected decline in total demand by 2026 primarily originates from reduced investment demand, rather than decreases in industrial or automotive demand. Institutional reports indicate investment demand is expected to fall by 52% year-on-year by 2026. Investment demand can be broken down into three components: First, exchange inventories may return to normal levels, reflecting diminished cross-regional hoarding incentives as policy uncertainties ease. Second, ETFs are expected to see net outflows of approximately 170,000 ounces under the base case scenario as investors take profits amid elevated prices. Third, bar demand is projected to grow by 30% year-on-year, driven by increased Chinese demand and a rebound in minting activities elsewhere. Notably, if platinum prices remain strong, investment demand and ETF flows could increase rather than decrease.

Industrial and automotive demand is more dependent on the global manufacturing cycle and capital expenditures in sectors like chemicals and glass. The USGS believes substitution exists among platinum group metals (PGMs), meaning price differentials between varieties can influence the slope of the medium-term demand curve through formulation substitutions. However, the pace and extent of substitution are constrained by process validation cycles and regulations, typically not occurring within a single quarter.

In 2026, platinum prices may exhibit high-level volatility for three reasons: First, the market is shifting from supply shortages toward fundamental supply-demand equilibrium, weakening the sustainability of sustained one-sided trends. Second, declines in investment demand—particularly exchange inventories and ETFs—could periodically provide incremental supply. Third, after consecutive years of supply deficits, low available inventories and high leasing costs create strong downside price support. Any supply disruptions or cross-regional allocation obstacles could still trigger rapid price spikes.

Under the base case scenario, 2026 pricing may be interpreted as a “reassessment of risk premiums during rebalancing.” Platinum's central price is expected to significantly exceed the 2025 average, but further upside requires either slower-than-expected declines in exchange inventories or insufficient realization of recovery elasticity. Conversely, if policy uncertainties rapidly dissipate, inventory returns coincide with ETF profit-taking, and industrial demand fails to improve, platinum prices may revert toward cost-based levels or test the lower boundary of their volatility range.

The first quarter serves as a critical window to validate the chain of events: inventory returns → declining leasing rates → easing physical tightness. Following the substantial gains in 2025, short-term capital behavior is likely to manifest in two ways: First, some long-term positions may realize gains during the annual transition and elevated volatility phase, triggering pulse-like price pullbacks. Second, industrial buyers may adjust procurement strategies amid high leasing rates and spot prices. A shift from leasing-based to spot-based procurement could temporarily exacerbate spot tightness and delay price corrections. Therefore, spot availability remains a core variable in short-term pricing.

Looking ahead to Q1, if exchange inventories begin orderly restocking, leasing rates decline from elevated levels, and ETF outflows remain manageable, platinum prices may consolidate within a range to digest 2025 gains. Conversely, if inventory returns are sluggish, leasing rates remain elevated, and supply-side disruptions or unforeseen events hinder cross-regional allocation, the upside risk for platinum prices remains significant. For the futures market, changes in the term structure, leasing costs, and delivery chain will be more explanatory than macro narratives.

If you have any questions, please feel free to contact SunSirs with support@SunSirs.com