The platinum market recorded a surplus of 268,000 ounces in the first quarter of 2026, marking its first quarterly surplus since Q3 2024. This turnaround was primarily driven by substantial net investment outflows totaling 225,000 ounces, mainly from exchange-traded funds (ETFs) and exchange stocks. Mine supply also saw an unusual increase for a typically weak first quarter, rising by 22% year-on-year to 1.32 million ounces, with South Africa contributing significantly due to normalized production after prior year flooding. Recycling also increased by 7% year-on-year, encouraged by higher platinum prices.
Despite the Q1 surplus, the World Platinum Investment Council (WPIC) still forecasts a fourth consecutive annual deficit for 2026, which has deepened modestly to 297,000 ounces, up from a previous forecast of 240,000 ounces. This deficit is expected to further deplete above-ground stocks, leaving less than three months' worth of cover to meet global demand by year-end 2026, with stocks projected to be 1.747 million ounces. The WPIC's next Platinum Quarterly report on September 9, 2026, is highly anticipated to update these forecasts.
Total platinum demand fell by 31% year-on-year in Q1 2026 to 1.468 million ounces. While industrial demand saw a recovery, offsetting declines in automotive and jewelry demand, the significant outflows from ETFs and exchange stocks were the largest factor. In contrast to the institutional selling, bar and coin investment demonstrated robust growth, jumping by 42% year-on-year to 105,000 ounces in Q1 2026, led by strong demand from Japan and China. For the full year 2026, total bar and coin investment demand is projected to rise by 27% to 718,000 ounces.
The average platinum price in Q1 2026 reached its highest level since Q2 2008, despite the market swinging to a surplus. Platinum futures closed at $1,788.90 per ounce, up 33.70% year-over-year. Analysts at J.P. Morgan Global Research target $1,800 per ounce by year-end, while Bank of America suggests a bull case of $3,000 per ounce by Q4 2026, implying 68% upside from current levels. The ongoing geopolitical tensions and rising energy costs, which fuelled inflation concerns and expectations of higher interest rates, have also played a role in the broader precious metals market.
Overall, the Q1 2026 surplus, driven by investor selling and strong mine supply, presents a nuanced picture for the platinum market. While it temporarily eased the supply-demand balance, the WPIC's persistent forecast of a full-year deficit suggests that the underlying fundamentals of tight supply and increasing industrial demand could continue to support prices and further deplete inventories.
