Platinum prices drop amid projected shift to market surplus

Platinum prices have declined significantly, trading at approximately 1,699 USD per ounce. This follows a period of rapid growth where prices approached the 3,000 USD mark, representing a roughly 42% drop from the January record of 2,923.70 USD.

A major shift in market fundamentals is driving this trend. The World Platinum Investment Council has revised its 2026 outlook from a projected deficit of 297,000 ounces to a surplus of 265,000 ounces. This represents a massive swing of over 560,000 ounces in just three months, marking the potential for the first annual surplus since 2022.

The change is primarily driven by a projected 18% drop in demand rather than supply fluctuations. Mining output is expected to remain stable, and while recycling is projected to increase by 8%, the primary downward pressure comes from three sectors:

1. Investment: A complete reversal is expected, moving from an inflow of 1.15 million ounces in 2025 to an outflow of 83,000 ounces in 2026, with ETFs expected to see significant losses. 2. Jewelry: Demand is forecasted to fall by 15%, with China seeing a 32% year-on-year decline in the second quarter due to high prices. 3. Automotive: Demand is expected to decrease by 4% as the rollout of electric vehicles proceeds more slowly than previously anticipated.