WPIC Forecasts 2026 Platinum Surplus as Demand Drops
With an eye for detail and over a decade of experience covering the mining and metals sector, Charlotte is passionate about bringing investors accurate and insightful information that can help them make informed decisions.
She leads the Investing News Network's video and event coverage, and guides a team of writers reporting on niche investment markets.
When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.
Edward Sterck of the World Platinum Investment Council said platinum fundamentals remain "very, very supportive" despite the current price pullback.
After bracing for a fourth consecutive annual supply deficit, the global platinum market is now looking at a severe whiplash, forecasting a projection of a 265,000-ounce surplus for 2026.
The World Platinum Investment Council (WPIC) slashed its 2026 total platinum demand forecast by 18 percent to 7.08 million ounces in its latest quarterly report, ending a multi-year trend of supply shortages.
Macro squeeze trigger investor exit
Platinum prices metal surged to an all-time high near US$2,924 per ounce in late January, acting as a high-beta proxy to the gold rally. By June 30, however, prices plummeted to a seven-month low of US$1,565.80.
The conflict between the US and Iran, along with subsequent shipping restrictions through the Strait of Hormuz, drove energy prices higher and forced global central banks to keep interest rate expectations elevated, crushing investor appetite for non-yielding assets.
Investors fled the platinum market in response. The WPIC revised its 2026 investment demand forecast down by 601,000 ounces, now expecting a net outflow of 83,000 ounces for the year.
“The shift to a forecast platinum market surplus in 2026 is overwhelmingly due to investment outflows that occurred during the first half of the year against a backdrop of heightened macroeconomic and geopolitical uncertainty,” WPIC CEO Trevor Raymond said.
Edward Sterck, director of research at the WPIC, noted that these liquidations were not purely speculative as investors used platinum to cover shortfalls elsewhere.
"I think that partially that was profit taking, but actually it was probably also a bit of a liquidity call with anyone with any kind of energy exposure needing cash to cover or support margins for their energy investments," Sterck told the Investing News Network (INN) in an interview.
Physical demand from the jewelry sector compounded the investment exodus. Global platinum jewelry fabrication will fall 15 percent to 1.88 million ounces this year, driven almost entirely by a 55 percent year-on-year plunge in China.
A fragile surplus built on scrap
On the supply side, higher prices early in the year incentivized the processing of hoarded material. The WPIC expects global recycling supply to increase 8 percent to 1.80 million ounces in 2026, offsetting a flat outlook for primary mine production. Total platinum supply will rise 2 percent to 7.35 million ounces.
Despite the headline surplus, the physical market remains fragile. In the same report, the WPIC revised its 2025 deficit estimate upward by 249,000 ounces to a staggering 1.44 million ounces.
“The modest forecast surplus follows three consecutive years of significant deficit and does little to reduce the platinum market’s reliance on exceptionally lean and increasingly illiquid above ground stocks,” Raymond added.
Even with this year's surplus, total above-ground stocks will only reach 2.01 million ounces by year-end, representing just 3.4 months of global demand. Sterck noted that anything less than six months of demand in above-ground stocks is considered fundamentally low.
While traditional automotive demand is forecast to fall 4 percent to 2.90 million ounces, industrial buyers are quietly accumulating the metal to build out artificial intelligence infrastructure.
Total industrial demand will grow 5 percent to 2.38 million ounces in 2026. Hyperscale cloud operators require high-capacity enterprise hard-disk drives and low-dielectric glass fiber for printed circuit boards, both of which rely heavily on platinum.
“China has earmarked nearly US$300 billion for AI infrastructure development through 2030, together with the US privately-funded buildout of AI technology, currently estimated at US$500 billion, creating new demand for platinum group metals across a wide range of applications,” Raymond added.
Future outlook remains divided
Analysts remain sharply divided on how the market will price these conflicting signals through the end of 2026.
Eugenia Mykuliak, founder and executive director of B2PRIME Group, emphasized that platinum retains a distinct operational profile from gold.
"Platinum and palladium face quite a different set of challenges, though. Their outlook is tied more closely to industrial activity and automotive demand than to monetary policy," Mykuliak told the INN in a previous email.
Bank of America analysts remain bullish, targeting an average platinum price of US$3,000 per ounce by the fourth quarter based on the long-term structural constraints in South African mining.
Conversely, JPMorgan Chase & Co. issued a highly cautious outlook in July, projecting platinum will average just US$1,800 per ounce by the end of 2026.
According to Raymond, platinum will likely trend with overall precious metals sentiment in the coming months, which could trigger a rebound in investment demand "especially should interest rate increases fail to materialise or be lower than expected.”
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
