I'm Charlotte Mloud with investingnews.com and here today with me is Edward Sturk, director of research at the World Platinum Investment Council. Thank you so much for being here. Great to have you as always. >> Oh, thank you for inviting me on. It's always great to chat. Of course, really good to be catching up with you. And of course, as usual, we'll be talking about the World Platinum Investment Council's latest quarterly report. This one gives us a look back at the full 2025 year. And the deficit for


the market ended up being over a million ounces, which is larger than initially projected. So, I thought we could start with a look back at last year and why that deficit ended up coming in higher. No, it's a good it's a good question and it's worth unpacking because there's some interesting takeaways um from the changes that we can probably reflect upon um particularly when it comes to the outlook for 2026 as well. So our last quarterly update was published in November. Um the big fundamental change


from the roughly 3/4 of a million ounce uh deficit we were forecasting then to the slightly more than a million ounce deficit we we're forecasting now principally comes down to investment. So in essence there are three areas of investment where we saw quite considerable relative strength in the fourth quarter. Firstly, bar and coin demand continued to be extremely strong, particularly out of China. But then we also saw exchange stocks which are the physical warehouse inventories that back um positioning in futures markets such


as the CME. We were expecting some unwinding of those exchange stocks going into the end of the year and in fact they've ended up remaining higher for longer and that's a theme that is is likely to continue through this year as well. And then we were also expecting previously some ETF profit taking on the back of higher prices and in fact we saw the opposite. We saw um incremental demand for ETFs in the fourth quarter um that accelerated into the year end. So those changes together in principle


drove the change in that deficit to deeper levels than we're anticipating before. It's probably worth also me just giving some context. You know what is a a deficit of over a million ounces? Well, the total market in terms of demand is about 7.8 8 million ounces. So you can see it's quite meaningful in terms of the the shortfall of supply relative to to that to that demand level. >> Well, and I believe is this the largest deficit in terms of how long the WPIC has been tracking the platinum market?


>> It is. Yes. So we we um you know we were set up in 2013 2014 rather. Our time series goes back to 2013 and it's the biggest annual deficit in that time series at the moment. >> Yeah. Yeah. So definitely worth noting and we'll we'll take a look at which of these dynamics you see continuing into 2026. But before we do, I thought it's worth mentioning the price activity we've seen in platinum just over the last year and especially the last couple of months. So after years of rangebound


trading, it started breaking out in 2025 and especially into December and January. I wonder were you were you expecting to see that large of a price move that quickly? Well, I mean I think you know if we cast our minds back to this time last year or even um you know the sort of end of April last year really actually the question was well why hasn't the price moved? You we were at that point in our third year of forecast annual deficits after two confirmed years. Um and yet as you said you know the price has remained


rangebound and I think really what what we were anticipating was that the tension that was building in the market we could see lease rates that have been going up consistently since um roughly the end of November beginning of December the prior year and we had strong OTC backquidation in the London market. You know those are indications that that there's tightness in the market and we were expecting that to translate into price action at some point. you know, I think it'd be fair to say that the when price began to move in


May, that probably validated that perspective. Um, but at the same time, and we don't forecast price levels. Um, you know, we just tried to give an interpretation of what market conditions should do in terms of translating into value expectations. But it's probably fair to say that the scale of the price move and the pace at which it moved was, you know, quite surprising. At the end of the day, only from beginning in May, platinum ended up 2025 uh with the price up 127%. Then going into 2026, we saw a


further acceleration of that. Um and then prices pulled back quite sharply. We've seen a kind of stabilization uh a consolidation phase if you like at pricing somewhere between $2,100 and say $2,400 an ounce. So still up quite considerably from last year and it's probably a fairly healthy period of of price consolidation. What was behind that? Um we've got the strong underlying fundamentals for platinum overall. Um but it's probably worth noting as well that from a macropolitical macroeconomic


landscape there was a high degree of uncertainty coming through the second half of last year that continued into 2026. And so to a degree that's translated into increased investment interest in the precious metal complex as a whole. Uh and um you know you can see that in in the price of gold and the price of silver and some of the trading activities that occurred around those metals and platinum um you know was a mutual beneficiary of that sort of trend. >> Yes, definitely we can see that activity


throughout the precious metals complex and good point. Although the platinum price did move quite quickly. We were waiting to see that for a number of years. So if we look forward to 2026, there's another deficit projected, although a smaller one than in 2025. I wondered if you could talk about whether you see that coming more from the supply or demand side, that deficit that's coming this year. >> Well, supply is for the most part pretty much price inelastic. So we've got higher prices. Um, you know, normally


you'd expect, uh, one way to solve for a supply demand shortfall is for higher prices to either incentivize new supply into the market or to disincentivize demand. And with platinum, particularly at the mining level, because these are typically deep level underground mines, they're poly metallic mines as well, producing all of the PGMs plus um, gold and and you know, some some base metals as well. You know, the economics of the mines don't depend just upon one metal. And so making planning decisions to


increase um let's say output in response to higher pricing for one commodity is very very difficult. That said all of the commodities have kind of gone up uh a fair degree and that's very supportive of mine economics. But going back to the, you know, the concept these are deep level underground mines in intrinsically it's just very difficult to flex output quickly and so these are long-term decisions and mining companies typically take quite a long time to consider making long-term investments. I


mean to give you one example we've got one new mine in our numbers this year and they started construction of that almost 10 years ago. So that's the kind of time frame you know we're talking about here. We do see more price elasticity when it comes to recycling supply. So, in our numbers, we've got a 10% year-on-year increase in recycling supply. And that's mainly driven by higher automotive and higher jewelry recycling rates. But on the demand side, actually demand for automotive


applications is largely flat yearon year um down very modestly given ongoing electrification. Uh jewelry demand is pulling back a bit from uh 2025 and that's largely due to um 2025 numbers being boosted by a really strong second quarter of last year in China. Um, in terms of industrial demand, a bit of a recovery from cyclical lows last year when we had fewer glass capacity additions, but the big change again year on year or versus our our last update is investment demand. So, we've got quite a


significant 46% year-on-year decline in investment demand in our numbers. That's resulting in the smaller deficit. And that's a big figure on, you know, in terms of a headline, but it masks actually a nuance, which is that investment demand is still extremely robust. So last year's figure was boosted by significant ETF additions. This year we're expecting neither additions nor uh disposals. So effectively ETF levels to remain flat at at what are actually pretty elevated and healthy ETF um you know holdings. Uh and


then in terms of exchange stocks, previously we were forecasting um exchange stock outflows. We're now expecting any very modest outflows on you know expect on an anticipation we see some easing of trade tensions and that can allow for metal to flow out of those um futures exchange warehouses. Uh but again actually that's still staying much higher than we were previously anticipating. So whilst the the headline figure just to reiterate whilst the headline figure is for quite significantly less incremental new um


investment demand this year actually is still a very robust investment demand environment. Yeah, I thought that was an interesting nuance there. So, thank you for going into that one. And what about the the bar and coin investment demand? How is that looking in 2026? >> Actually, pretty strong still. So, we're still expecting um strong continued growth out of China, which has been uh the main market for growth over the last few years. Um but we are expecting a bit of a rebound in in the US. So, demand in


the US in 2025 was suppressed by effectively a shortage of product availability. you got high lease rates. A lot of the fabricators of investment bars and coins um would typically lease metal for the production process so that they aren't exposed to to you market price fluctuations. The elevated lease rates have made that very expensive for them and so they just manufactured less product. Ironically, we saw strong um investor demand for bar and coin in China uh sorry in the US last year um but they just couldn't find the product.


Um and we are expecting that that situation to ease a bit this year. um together with um there were some you know trade barriers to to importing borrowing coin into the US last year that have now been solved. Um and so yeah just a little bit of a stronger market in North America as well. >> Yeah, that's an interesting point to note as well. And another nuance I wanted to pull out from the report. It notes that there there is a factor that could influence uh a higher deficit in 2026 which is exchange stocks at the


Guangu Futures Exchange in China. So I wondered if you could go into that. >> Yeah. So it's an interesting new part of the market that we haven't yet captured in our supply demand balances. So as I've already you know we've already talked about quite a lot. Our our investment demand includes movements of those exchange um stock uh warehoused inventory if you like. Um that's the physical metal used to back futures positions on the different exchanges. The CME is the biggest one in the west.


You've also got um the securities exchange in Japan. And now we've got a new one in China, the Guangu Futures Exchange, which launched uh in November last year. Now, their first contract has got a June expiry. So that's quite a long lead time to that. As time goes on, anyone holding short positions on the GFEX uh will need to collateralize those positions uh with exchange stocks and we will gradually capture that that that level of incremental exchange stock build as the data becomes available. At


the moment, we don't have a good estimate of what that would be, but it would be incremental to our investment demand and, you know, ultimately could help deepen the supply demand deficit based upon our our current outlook. >> So, that will be a point to keep an eye on moving forward. And I wondered if there's anything else that you would add on China's growing role in platinum demand because it sounds like something that continues to develop. >> Well, China's been the biggest consumer


of of platinum and PGMs globally for a number of years. I think where it's becoming more and more impactful is not so much on necessarily just on the demand side of the equation where clearly it's as the biggest producer it has been impactful but a lot of value establishment occurs in in the secondary market in terms of you know derivatives trading um in terms of the recirculation of metal lease markets and so on and because of the structure of that China has in terms of its domestic market it hasn't been um


you know as impactful in those areas as it as it as it probably should be as the biggest consumer. So I think with things like the GFX launching um and the fact that that's going to be open to international participation in due course and that obviously creates arbitrage opportunities between the different exchanges in a way you know China despite being the biggest um consumer has been sort of a price taker in the past um whereas now as a nation it's going to have much more um much greater impact on on value establishment


in international markets. That seems to be again another theme that follows across the precious metals market. And one point I wanted to bring up is growing tensions in the Middle East and how that could impact platinum. Definitely for gold and silver, there's that element of safe haven demand that can come into play. For for other commodities, it can influence trade flows. And I'm not I'm not quite sure how it pans out for platinum. So I know it's very uncertain times, but is there


anything you can point to in that regard? Well, I think platinum, you know, follows the same path as gold and silver as we saw through that December uh January period um this year where where it is a safe haven investment. Um in a way, if you look at just that part of this um with regards to gold, silver and platinum, uh it's been a bit surprising not to see greater strength in those markets just given the uncertainties and um you know to a degree the inflationary factors that we see coming through from higher oil


prices and so on. That said, I think the the the if you look at the dollar activity, it seems like the markets are pricing in um fewer interest rate cuts because of higher inflation concerns in the US. Uh and so therefore a stronger dollar and that's negative for commodity prices in general. And you know maybe there's an argument to be said that even though the US is is one of the protagonists in in this uncertainty um actually the dollar safe tap trade is still kind of in in play here versus


everyone looking at the precious metals um last year and earlier this year. I think however you know if we look at the the economic environment um nothing much has necessarily changed in the US um you we saw some pretty poor non-farm payrolls last last week um and so the argument for a pivot to hard assets including precious metals is probably one that's still there and I think we'll will remain there through the course of this year however just taking the conflict in terms of uh the impact of


trade flows the Middle East while not a major producer or consumer well they're not a producer of PGNS but and they're not a major consumer of the of PGMs. You know, a number of those countries have become quite important conduits for uh commodities trading and including the PGMs. So, there's a possibility we see some short-term disruptions just to the movement of metal um more than anything else. Of course, on the demand side, um you know, oil does have an impact. So, a portion of our industrial demand profile


is attributed to um petroleum refining and and and so and so on. catalysts that are being used in those refineries. You know, if those are not being um utilized to their full extent because of uh less oil availability or or higher unknown competitive oil prices, that could have a small incremental negative in terms of demand um for platinum, but I'd say it's probably more likely to fall into next year than this year. So, it's probably more of a 2027 story. >> It's a definitely evolving situation, so


we'll see how it plays out. and I'm sure we'll talk about it again in the future. I wonder are there any other more global factors that you are watching heading into 2026 for the platinum market that we didn't cover yet? >> I suppose one of the major things really is just um the trade tensions in in the US that emerged last year with tariffs and and various investigations and so on. And um the two ones I'd highlight here are the section 232 investigation into critical minerals which includes


the PGMs um and the USITC investigation into alleged uh dumping of Russian origin palladium. Now both those processes are still ongoing and have quite significant bearings on um you know how sticky metal has been onshore proactively onshored into the US um remain stuck in the US or whether it would be made available to the international market you know perhaps the leasing market back in London um and you know whether that metal would help ease some of the market tightness we're seeing at the moment. So those


investigations are quite key. Um really the timeline for this is kind of going into the first part of H2. So we're looking at, you know, greater greater kind of data discovery as we probably go through the course of the second quarter. Um, and then, you know, potentially much greater certainty in H2. At the moment, if you look at things like those CME, uh, warehouse inventories, they, you know, every time we see a spike in lease rates, we see people trying to move metal out of the exchange, uh, because there's an


incentive to do so. Uh, but they, but it just keeps on kind of going back to previous levels on ongoing uncertainty. So I think you know that's something that's helping keep keep the market tightness. That said, it's worth just stressing that, you know, with the deficits that we've had over the last two and a half, so three and a half years or so, you know, you're looking about a cumulative almost 4 million ounce deficit over those years. Fundamentally, releasing several hundreds of thousands of ounces from US


inventories isn't enough to re um to rebuild above the depletion the above ground stocks that have been depleted over the course of those deficits. >> It sounds like we're heading into quite an interesting year in 2026. So, we'll talk we'll talk throughout, but before I let you go, any any thoughts you would add for investors right now? I know the WPIC isn't making price predictions or giving advice, but I think a lot of people are wondering, all right, is this the time to enter the market? What


should we do? So, any any final thoughts there? >> Look, I think, you know, the kind of a lot of the themes that came out last year are going to persist through this year. Um, so you've got the strong underlying supply demand fundamentals. You've got the depletion of above ground stocks that I just touched upon which were a balancing or still a balancing factor in the market but down to unsustainably low levels and just that you know the shortage of that those above ground stocks is a major factor in


the tightness that we see in the market. you that's going to persist with another year of deficits and then you've got the kind of macropolitical macroeconomic uncertainty which again as we've seen just in the last week and a half or so as we saw with the actions in Venezuela you that's going to persist this year as well so I think it's pretty hard to kind of take a negative view to precious metals in general from where we stand um but given that the strength in the price moves you know I think it


would probably be also to say are we going to see those repeat this year and that's that's that that would be a harder thing to call but overall Just to kind of reiterate, a lot of those themes behind the price rally last year are still in play this year and and really arguably for the foreseeable future. >> I think that is a great note to end on. So, thank you so much for coming on to go over what you see coming for Platinum. This was very helpful. >> Thank you. >> Of course. And once again, I'm Charlotte


Mloud with investingnews.com and this is Edward Sturk with the World Platinum Investment Council. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below.