The risk of a protracted US-Iran conflict, the accelerating regionalisation of PGM markets, alongside the launch of platinum and palladium futures on China’s Guangzhou Futures Exchange (GFEX), represents a structural shift in how platinum group metals (PGMs) are sourced, priced and traded.

“We expect these themes, rather than fundamentals alone, to define the year ahead,” precious metals consultancy Metals Focus PGMs director Wilma Swarts says.

With this in mind, Metals Focus’ ‘PGMs 2026’ report offers a comprehensive analysis of the PGM industry and was released to coincide with the start of London Platinum Week.

It examines a year in which all five PGMs returned to deficit and prices were materially higher, against a backdrop of intensifying investor flows, gold-related substitution in the jewellery market and growing strategic ownership narratives.

Swarts notes that, in 2025, internal combustion engine (ICE) and hybrid vehicle production still accounted for the vast majority of light vehicles, noting that battery electric vehicle (BEV) penetration is increasing steadily. What has changed markedly is the investor story.

“Platinum’s re-rating last year was driven as much by strategic accumulation and correlation with gold, as by physical fundamentals and tighter available stock levels, and that dynamic will likely continue to shape pricing in 2026.”

The report indicates that all five major PGMs recorded a physical deficit in 2025, with the PGM basket price having increased by 28% year-on-year, driven by tightening physical balances, intensifying investor interest and concerns over the impact of trade and strategic access policies on trade flows.

Platinum recorded a third consecutive deficit of 461 000 oz, palladium a fourth consecutive deficit of 433 000 oz and rhodium a 116 000 oz shortfall. Iridium and ruthenium recorded deficits of 34 000 oz and 312 000 oz, respectively.

Metals Focus explains that platinum’s 2025 re-rating was driven by improved investor access, optimism towards gold-related substitution and episodic physical tightness, supported by the launch of platinum and palladium futures on China’s GFEX in November 2025.

The company describes retail investment in platinum as a standout, rising 96% to 402 000 oz, with record Chinese buying accounting for about 60% of global purchases.

Additionally, the report notes that above-ground stocks continued to draw down across the complex. Platinum stocks fell to 9.3-million ounces, equivalent to about 14 months of demand cover, while palladium stocks declined to 10.7-million ounces, or 13 months of cover.

Rhodium above-ground stocks fell to less than four months of demand cover, supporting elevated prices despite a narrower deficit.

Moreover, the report indicates that primary mine supply continued to contract in 2025.

Metals Focus says South African production was disrupted by flooding at several operations, while North American supply declined sharply following the full year of Stillwater West being placed on care and maintenance.

The company explains that total platinum mine supply fell 4% year-on-year to 5.6-million ounces, with palladium mine supply mirroring this decline at 6.3-million ounces.

Further, the report indicates that total PGM scrap supply rose 7% year-on-year to 4.9-million ounces in 2025.

It notes that autocatalyst recycling was supported by extended scrappage schemes in China and stronger autocatalyst recycling in the US, rebuilding from significant declines over the past two years.

The rise in jewellery scrap was largely a product of destocking in China during the second half of the year.

Metals Focus says automotive platinum, palladium and rhodium (3E) PGM demand fell by 2% to 11.9-million ounces in 2025, the first time this has dropped below 12-million ounces since chip shortages impacted the market in 2022.

Light-duty vehicle production grew by 3%, but gains were skewed towards BEVs, which achieved a 16% market share.

Platinum jewellery demand rose 10% to a nine-year high of 2.2-million ounces, as manufacturers pivoted out of gold to platinum amid elevated gold prices.

Additionally, the report notes that electronics demand rose 8% to 1.3-million ounces across all metals, fuelled by the AI boom, while chemical demand grew 3% to 1.9-million ounces, with ruthenium benefiting from caprolactam expansion and palladium from plastic precursor production in China.

Glass demand, by contrast, fell sharply across both platinum and rhodium amid liquid crystal display (LCD) capacity closures across Asia.

“A new dimension to the 2026 outlook is the accelerating regionalisation of PGM markets. The US Section 232 proclamation, China’s fifteenth Five-Year Plan targeting strategic material security and the EU Critical Raw Materials Act are all reshaping how PGMs are sourced, processed and priced,” Metals Focus says.

OUTLOOK

Metals Focus says platinum is forecast to remain in a deficit of 312 000 oz this year, with above-ground stocks declining to nine-million ounces. Following a sharp rerating in 2025, the report indicates that the metal is expected to consolidate at elevated levels, averaging $2 190/oz this year, up 71% year-on-year.

Palladium, meanwhile, is expected to average $1 570/oz, up 37% year-on-year. While still in deficit, for a fifth consecutive year, at 376 000 oz, the company says palladium faces limited investor appetite, keeping it at a discount to platinum.

Rhodium is forecast to rise 62% year-on-year to $10 200/oz, with above-ground stocks falling further alongside recovering glass demand and constrained supply.

Additionally, iridium demand is expected to remain flat at 273 000 oz, with stable mine supply leaving the market in a 34 000-oz deficit. Metals Focus says tight, illiquid conditions should support an average price of $7 200/oz, up 64% year-on-year.

The company explains that ruthenium faces divergent end-use trends, with continued strong growth in hard disk drives driven by AI-related data storage expansion offset by weakening chemical demand as caprolactam capacity additions slow.

It notes that the market remains in a 210 000-oz deficit and, following a step-change in prices this year, ruthenium is forecast to average $1 560/oz, up 114% year-on-year.

“All five metals remain in deficit, but price outcomes will increasingly be shaped by investor flows, stock movements and policy intervention rather than supply-demand balances alone,” Swarts notes.