Platinum Market to Post Deficit for the Third Consecutive Year in 2025 - WPIC

The World Platinum Investment Council (WPIC) has announced that the global platinum market is expected to experience a structural deficit for the third consecutive year in 2025, due to constrained mine supply despite increased recycling and a 1% drop in demand.

With its members consisting of major Western platinum producers, WPIC anticipates a 539,000-ounce deficit in the global market next year, compared to the revised forecasted deficit of 682,000 ounces for this year.

WPIC's research director, Edward Sterck, stated, “With automotive demand expected to reach its highest level in eight years and jewelry demand anticipated to rise for the second consecutive year after hitting a low, the market will be facing a significant material deficit again in 2025.”

This year’s forecast was adjusted down from the previously expected 1.0 million-ounce deficit in September, due to a more stable energy source in South Africa aiding the processing of more concentrate held as inventory in the country’s mines.

WPIC expects mine supply to decrease by 2% next year due to lower production in South Africa, while being completely offset by a 12% improvement in recycled supply.

Meanwhile, demand from the automotive sector, which uses platinum in catalytic converters to reduce harmful emissions from vehicle exhaust systems, is projected to decline by 2% this year to 3.2 million ounces, driven by economic uncertainty and high interest rates.

Utilizing data from consulting firm Metals Focus, WPIC forecasts that demand for automobiles will rebound by 2% next year, reaching its highest level since 2017, due to an increase in hybrid vehicle sales, stricter emission regulations, and the substitution of platinum for palladium.

To close the deficit, above-ground stocks are expected to decrease by 15%, falling to 3.0 million ounces, which will equate to just over four months of global demand.