Supply constraints, a shifting automotive industry, and war in the Middle East are pulling the PGM markets in different directions.
The five platinum group metals, platinum, palladium, rhodium, ruthenium, and iridium, are often discussed as a group, but their outlook for 2026 is anything but uniform. Platinum is set to record its fourth consecutive annual deficit, according to both Johnson Matthey’s annual PGM Market Report and the World Platinum Investment Council’s latest Platinum Quarterly. The WPIC warns that above-ground platinum stocks could fall below three months of demand by year-end. Palladium and rhodium, by contrast, are both forecast to tip into modest surplus as declining output of petrol and diesel vehicles weighs on autocatalyst demand, the single largest use of both metals.
The WPIC notes that Q1 2026 briefly bucked the trend, with platinum recording a 268,000-ounce surplus, its first in six quarters, as investment demand eased following the late-2025 price rally and the outbreak of war in Iran unsettled markets. But the council expects this to reverse throughout the remainder of the year, with the full-year deficit forecast at 297,000 ounces.
On the supply side, total platinum supply is forecast to grow just 2 percent in 2026, with recycling up 9 percent on higher prices but mine supply stable. The most significant supply development across all PGMs is a steep drop in Russian palladium shipments: Norilsk Nickel has guided for output to fall 10 to 11 percent, its lowest level in at least two decades, and has been permanently excluded from the US market following anti-dumping rulings last year.
War in Iran Continues to Be an Uncertainty Factor
Demand is shifting as much as supply. The WPIC forecasts total platinum demand to fall 9 percent to 7.67 million ounces in 2026, with jewelry down 12 percent and investment demand down 54 percent, partly offset by 9 percent growth in industrial consumption. Johnson Matthey points to the AI-driven boom in data center construction as a key new demand driver, lifting demand for hard disk drives that use platinum and ruthenium. This year will also see the first meaningful commercial use of iridium in green hydrogen electrolysis, as large projects in Germany and Portugal near completion.
The biggest unknown is the Iran war. Damage to regional petrochemical infrastructure has pushed feedstock prices sharply higher across Asia, where many PGM-catalyzed chemical processes are concentrated. If disruption is prolonged, planned capacity expansions may be canceled, removing a meaningful source of long-term demand across the group.
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