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Monday - UBS has maintained its projection that the platinum market will face a significant undersupply by approximately 500,000 ounces, or 6.4% of demand, in 2025. The firm indicated that if trade tensions continue to ease, the deficit for the full year could exceed their current expectations, especially considering the substantial shortfall recorded in the first quarter of 2025.
According to the World Platinum Investment Council (WPIC), the platinum market experienced a considerable deficit of 816,000 ounces in the first quarter of 2025, a notable increase from the 286,000 ounces deficit reported in the fourth quarter of 2024.
This deficit represents nearly 36% of global demand and is one of the largest since the WPIC began tracking this data in the third quarter of 2014. The WPIC attributes the sizeable gap to three main factors: a significant 13% year-on-year decrease in global mine supply, a robust 9% increase in jewelry demand, and an unprecedented surge in investment demand.
Mine supply was heavily impacted by severe weather conditions and operational restructuring, leading to a sharp decline in output from South Africa, Zimbabwe, and North America. On the other hand, jewelry demand saw substantial growth across Europe, North America, Japan, and China. Investment demand reached a record high since the WPIC started monitoring, likely spurred by concerns over potential US tariff increases, which could have prompted stockpiling.
Despite a rise in recycling supply and a decline in industrial and automotive demand, the platinum market’s large deficit has resulted in a significant reduction of above-ground inventories, now standing at 2.3 million ounces, down from over 5 million ounces at the end of 2022.
With the WPIC adjusting its deficit forecast for the year to 996,000 ounces from an earlier estimate of 848,000 ounces, the market is anticipated to see a deficit of 180,000 ounces for the rest of the year. UBS suggests that a further decrease in above-ground inventories below 2 million ounces could lead to more pronounced price movements in the platinum market.
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