PGM’s structural deficit underpins positive long-term outlook – WPIC

Fri Aug 21 2026

The long-term outlook for platinum group metals (PGMs) is continuing to strengthen as persistent supply deficits, resilient automotive demand, expanding industrial applications and constrained recycling volumes reinforce increasingly tight market fundamentals, according to the World Platinum Investment Council (WPIC).

According to WPIC research director Edward Sterck, the PGMs market continues to underestimate the breadth of the platinum demand profile, while overestimating the speed at which battery-electric vehicles (BEVs) will displace traditional automotive demand.

Battery electrification continues to expand globally, but at a more measured pace than many earlier forecasts anticipated. As a result, internal combustion engine (ICE) vehicles, particularly hybrids, continue to support platinum demand for longer than previously expected. Tightening emissions regulations in major markets such as the EU and China also require higher PGM loadings in ICE vehicle catalytic converters, further supporting demand.

Beyond the automotive sector, industrial demand is emerging as one of the market’s most compelling growth stories. Platinum already plays a critical role in industries ranging from petroleum refining and glass manufacturing to pharmaceuticals. AI infrastructure development is also creating additional sources of PGM demand, including applications in e-glass yarn, thin-film coatings and optical crystal technologies used in high-performance data transmission.

Hydrogen remains one of PGMs’ strongest long-term growth opportunities. As countries expand renewable-energy generation and seek alternatives for sectors that cannot be directly electrified, green hydrogen is expected to become an increasingly important source of platinum demand throughout the 2030s.

PGMs Supply

While PGM demand continues to diversify, supply remains constrained, with PGM market deficits persisting for several consecutive years and steadily reducing above-ground inventories to what WPIC regards as unsustainably low levels. These structural deficits provide the foundation for the market’s longer-term outlook.

Recycling offers some relief, but only to a limited extent. Recycled PGM supply is expected to increase by about 10% this year as stronger prices improve the economics of recovering metal from end-of-life products. However, recycling cannot expand indefinitely because future volumes are ultimately determined by the number of PGM-containing vehicles reaching the end of their service lives.

In terms of PGM pricing, recent platinum price movements reflect two distinct market phases. The initial rally was driven primarily by tightening supply and demand fundamentals, while broader macroeconomic and geopolitical developments have more recently influenced prices, with PGMs also attracting attention as an alternative precious-metal investment.

Looking ahead, PGM lease rates remain one of the clearest indicators of physical market conditions. Combined with declining above-ground stocks, these indicators will help determine whether the market continues to track WPIC’s forecast of sustained deficits through 2030.

For investors and industry stakeholders, the PGM story increasingly extends beyond its traditional automotive roots. Continued demand from hybrid vehicles, emerging AI applications, hydrogen technologies and established industrial sectors is broadening the PGM demand base at a time when supply growth remains limited and recycling faces natural constraints. Together, these factors continue to support the metal’s positive long-term market fundamentals.

Source: https://www.engineeringnews.co.za