Platinum rose 3% on Monday, recovering ground after the correction from January's peak above $2,300. The metal remains 30-40% above year-ago levels despite the pullback, reflecting the fundamentally tight supply-demand balance.
The World Platinum Investment Council estimates a 2025 deficit of 850-1,082 koz, driven by constrained South African and Russian mine supply, modest recycling volumes, and firm industrial demand. Above-ground stocks have fallen to approximately 4.5-5 months of cover.
Johnson Matthey's May 2026 PGM Market Report expects platinum demand in 2026 to again exceed supply. South African primary output is contracting due to structural challenges, including mine depths reaching 2km+, rising electricity costs, and regulatory uncertainty.
Automotive demand for platinum is rising as diesel market share stabilizes in Europe and platinum-for-palladium substitution accelerates in gasoline catalyst systems. Chinese heavy-duty truck production continues to support diesel PGM demand.
The platinum market is structurally tight. Above-ground stocks at 4.5-5 months of cover are historically low. Buyers should consider extending forward coverage to 6-9 months. The South African supply risk alone justifies a strategic inventory buffer.