Platinum prices on NYMEX fell 5.07% to $1,798/oz Monday, continuing a 13% decline over the past month. The selloff was triggered by the World Platinum Investment Council's (WPIC) updated market balance forecast, which projects the market shifting from a deep 692 koz deficit in 2025 to a near-balanced position with just a 20 koz surplus in 2026.
Despite the headline shift toward balance, physical market conditions remain tight. CME data shows sustained elevated lease rates and strong backwardation in OTC forwards, indicating constrained physical availability even as the WPIC models approach neutral. Above-ground stocks have declined 42% over three years, leaving a thin buffer against any supply disruption.
Mine supply is expected to rise approximately 2% in 2026 as some work-in-process inventory is released, but this is modest relative to the cumulative deficit drawn down over the past three years. Combined automotive, jewelry, and industrial demand is forecast to fall only 1% year-over-year, suggesting continued structural tightness beneath the 'balanced' headline.
The South African supply risk remains elevated. Aging mine shafts, power supply instability from Eskom, and labor cost pressures all constrain the ability of Amplats, Impala, and Sibanye-Stillwater to ramp production meaningfully. Any operational disruption in South Africa would quickly invert the 2026 balance back into deficit.
The WPIC's balanced forecast for 2026 provides near-term price relief, but the underlying tightness in physical markets argues against expecting sustained weakness. Use pullbacks to $1,700-1,800 as buying opportunities for H2 coverage. The backwardation in OTC forwards signals that prompt physical is more valuable than deferred — secure near-term needs promptly.