Edward Sterck: Platinum in "Deep Deficit" Again, Will Price Keep Rising in 2026?
Summary
Platinum Market: Three consecutive annual deficits and elevated lease rates signal tight physical markets, with 2025’s deficit estimated at 692k oz and tightness persisting despite a sharp price rally.
2026 Outlook Nuance: A headline surplus of ~20k oz hinges on ETF profit-taking and CME inventory outflows; absent these, the market reverts to a sizable deficit near 400k oz and above-ground stocks remain depleted.
China: Strong bar/coin demand has made China the largest platinum investment market, jewelry demand is rising as a lower-cost alternative to gold, and the new Guangzhou futures exchange enhances domestic participation and price discovery.
Platinum ETFs: Holdings were broadly unchanged in 2025 despite price strength; 2026 projections assume ~170k oz of profit-taking that is uncertain and price-dependent, making ETF flows a key swing factor.
Supply Dynamics: Deep-level PGM mines are inflexible and require multi-year price strength for expansion, while recycling should grow but remains constrained by end-of-life vehicle availability and financing.
Auto & Industrial Demand: Auto demand remains higher for longer amid slow electrification and some platinum–palladium substitution; industrial demand is set to step up with new glass, chemicals, and refining projects.
Trade Tensions: US Section 232 on critical minerals and a separate palladium anti-dumping case could introduce tariffs/quotas, with outcomes influencing CME stock releases and substitution dynamics.
No Specific Tickers: No individual public companies or ETFs were named; the discussion focused on platinum, the Materials sector, and Precious Metals & Minerals miners’ supply constraints.
Transcript
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, thanks for inviting me on again. It's um it's good to good to catch up and uh to talk all things platinum, >> of course. And as usual, we're going to be going through the World Platinum Investment Council's latest quarterly report. And it's an exciting one because we get to look back at 2025 as well as forward into 2026. So definitely we want to get over to the 2026 outlook. But before we do that, I was hoping we could take a look back at the year that we've had so far and just get your overall thoughts how you would sum up 2025 for Platinum because it's been quite an interesting year. >> It certainly has been. Um, so from a supply demand perspective, you know, I think it would be fair to say that it's the third consecutive year of a pretty deep and substantial deficit. 692,000 ounces is our forecast for the deficit for the full year. Um, as a reminder, the total size of the uh of the of annual demand is just shy of 8 million ounces. So, you know, fairly meaningful uh shortfall. It's really been a year that's been characterized by a lack of supply more than by demand growth, though. So in fact if you look at if you look at demand total demand was actually down a fair bit year on year or was expected to be um but it's really just that supply is is um by far and away uh falling short of of of annual demand requirements and so um uh hence we have the deficit. I think you know obviously from a a look back perspective what's been uh you know pretty hard to avoid this year has been the price action. So, you know, really coming into May, uh, London Platinum week, uh, that was really the beginning of of the of the price rally. And at one point, we were up 88% year to date. It was the strongest performing uh, commodity across the spectrum for a while. I think silver's eclipsed it recently. Obviously, quite a lot of news going on there. Um, but overall, we've had a period of price consolidation and price has remained um, extremely robust. You know, what are the factors that are driving that? Well, I think you know firstly third year of big deficits, depletion of above ground stocks uh you know I suppose that they must have fallen to levels that would be considered unsustainably low and so uh you know the the the availability of metal in the spot market has just not been as as liquid as it would have been in the past and so that creates this market tension and one of the other things that is notable about that is that market tension can be seen in things like lease rates. So that's the cost of borrowing metal. um they're at historically elevated levels which again is an indication that there's a shortage of metal in the prompt market. But a second order impact of that is that you know the leasing market is actually really quite significant if you look at it in terms of annual volumes. Remember this is including turnover. So you know it's not it's not you know an ounce per year but the leasing market peaked at about 60 million ounces back in um a few years ago. It's eased a little bit, but on average, it's been about 30 million ounces a year um for the last 5 years uh or thereabouts. But of course, you know, with these extremely elevated lease rates, we're seeing uh you know, we think that we're seeing people change how they own platinum. So rather than leasing it, they're switching towards outright purchases. And the timing for that looks like it also coincided with kind of around the the sort of May June time, which is when we began to see this um you know, this strong price action come through. So, a lot of interesting things, you know, I think um we're still seeing we still see that market tension in the market. So, you still got elevated lease rates. You've still got strong backquidation in the London OTC market and so it just looks like these tight mark market conditions are set to persist. >> Well, I think that's a great review of 2025 and we can now start to take a look forward at the next year. And one thing that really stood out to me when looking at the report from the World Platinum Investment Council is that next year the market actually after these three years of deficit starts to come into balance. But it sounds like from what you've been saying what's in the report there's there's a little bit of nuance to that because people people might look at that and think that means lower prices etc. So how how would you characterize the market in 2026 keeping in mind that it comes into balance? So, we've got a uh a tiny surplus for next year in our numbers. So, 20,000 ounces um as you said, you know, that's effectively a market imbalance. I think it's probably worth um bearing in mind a kind of a few things. So, firstly, [clears throat] excuse me, firstly, it is contingent upon um some profit taking from ETFs. So if you look at our numbers, uh we're expecting 170,000 ounces of profit taking from ETFs uh in 2026, which is obviously going to be contingent in itself on on on a high platinum price. I would say that there is probably a bit of a a risk associated with that outlook. So um you know, this year for example, ETF holdings have been broadly unchanged and that's despite the fact we've had this tremendous price rally. So, you know, it certainly feels as though um you know, the motivation for the holders of those ETFs is um is perhaps pivotal on, you know, expecting even higher platinum prices than we've seen um so far this year. The second area where um you know, the deficit or the surplus of 20,000 ounces contingent on is on 150,000 ounces flowing out of CME exchange stock inventories and being made available to the market. Now, if we don't have that ETF profit taking and we don't have the CME inventory unwind, then we remain in a deficit, a quite substantial deficit of approaching 400,000 ounces for 2026. You know, so there are some nuances to this. The other thing to bear in mind in terms of a balanced market is actually a balanced market doesn't solve for the fact we've had three years of deficits. it doesn't in any way um you know I suppose rebuild above ground stocks and it's the shortage of above ground stocks that seems to been one of the major catalysts behind this price action and behind the market tightness. So I think a balanced market is is one where um you know clearly it's not in as deep a deficit as as we forecast for for this year. Um but certainly it doesn't mean that the market tightness the shortage of metal in the market is going to be solved. So definitely it sounds like there is is some nuance there and factors to watch next year. The other thing I was getting from the report is that the market outlook is contingent on what we see happening with trade tensions. So I think we've talked a lot over the course of this past year about tariffs and everything going on there. So what are you going to be keeping an eye on this coming year in in that regard? >> Well, it's a you know it is a really interesting area. So you've got you've got um broadly speaking, you know, two different aspects to um to the trade t tensions that are mainly being driven by the US of course. Uh and it's worth noting that, you know, when I mentioned that we our forecast in terms of a balanced market for next year is contingent upon exchange stock outflows, making that metal available is in of itself um likely to be a function of an easing of of of you know tariff fears in the in the US. So effectively if we look at the US landscape and you've got two investigations that are ongoing at the moment. You've got the section 232 investigation into critical minerals which includes the PGMs that was started by the Trump administration back in uh I think it was early July and then you've got a separate totally separate and unrelated investigation into alleged dumping of Russian origin palladium into the US market. Um and as a result of the fact these are two separate uh uh investigations, we kind of need to look at them um separately really. So starting with the section 232 investigation in effect this is looking at uh the supply of critical minerals from outside of the US and whether that supply presents a threat to national security. Now there's a number of different um sort of ways of testing that but but but the threshold for for concluding or affirming that it is a threat to national security can be pretty low. So for example it can be as little as you know are are these foreign imports um damaging the US domestic industry to the point where the domestic supply of these materials would not be available during a period of an emergency when the US might lose access to international markets. So, that's a pretty low bar to set. The other thing to bear in mind is that um you know, this investigation is probably being uh conducted by um sort of fairly mid-level bureaucrats. And given you've got a relatively sort of hostile environment in the US between the White House and uh and various parts of the federal government, you know, it's quite possible that actually the simple solution for the person running these investigations is to go, I'll just conclude that it is a threat to national security because ultimately once that happens, the report is sent to the president and it's at his sole discretion as to whether he takes on board the uh the recommendations in the report or whether he chooses to ignore them. Uh and to give you an example of this, back in 2019 during Trump's first presidency, uh there was a section 232 investigation into uranium supply uh for the civilian nuclear industry uh that concluded that foreign imports were a threat to national security, but Trump chose to ignore it. Uh I would note though that back then roughly 40% of US uranium imports came via Russia and the relationship between uh the Trump administration and Russia was probably a bit different back then to to that which it is today. So in terms of the the the outcomes from the section 232, if you look again at that uranium one, they recommended a combination of import search charges uh and uh scaling import quotas over time in order to try and make the US domestic industry more robust and and better able to to supply its own needs. So that's possible possibly one of the outcomes that we might expect to see when this investigation becomes public. Obviously whether Trump chooses to uh to accept the recommendations or if he chooses to ignore it, you know, that I think is is probably harder to judge. [snorts] Then if you turn to the palladium anti-dumping investigation, the US ITC has already determined that uh Russia has been dumping palladium into the market at uh uncompetitive rates and that's been uh helped by some form of state subsidies. Now, I'm not sure I totally agree with all those findings, but that doesn't really matter because they've made a judgment that there is uncompetitive practice. The next step of the process is to determine what action to take. Uh, and again, that could be some kind of import duty or search charge and Russian origin palladium or it could be some form of quota. Now, obviously for platinum there is a there is a feed through impact here because there is an element of substitution that can occur between platinum and palladium and catalytic converters. So, you know, it is something to watch. The dates for the uh the initial decisions, I think, are the 29th of December and the 6th of January on this. Um, but it's possible those dates may be pushed back due to the government shutdown that that has obviously now ended, but has probably caused some delays. So, I think, yeah, going into next year, um, we should get greater clarity on both of these investigations and it's certainly something that we'll be watching in terms of trying to inform our estimates for 2026 as a whole. Those will be great points to follow up on next year and really good to go into the comparison to the uranium 232 investigation. I know our audience is very familiar with uranium, so some of that will will probably be carrying over there. I also wanted to ask you if you could break down what we see happening in platinum investment demand. It looks like it is going to come in at a 5-year high for 2025, but there's there's multiple different components there. I know you've talked a little bit about some of them already, but the situation seems to then change in 2026, so that's a little bit different, too. What would you pull out there for for investors to be aware of? >> Well, in terms of physical bar and coin demand, um, this year has been very much characterized by significant strength and demand out of China. So the Chinese market has just been growing um you know basically from more or less zero back in 2019 um to becoming the biggest market in the world for platinum investments products um uh and you know I think that momentum is likely to continue um but maybe not at quite the same sort of pace going into 2026. In contrast to that, one of the challenges in other markets and the US would be um you know one to focus on here probably is that the high lease rates have meant that manufacturing uh platinum investment products has just simply become too expensive. Um you'd have to charge too big a premium to the buyer to to to be able to compensate for the high lease rates because the the bar fabricators, the coin fabricators often don't own the metal. They just lease it and then they close that lease out when they sell the investment product. Um, and that now has just, like I said, it's just become too expensive. So, there's a shortage of of there's a shortage of product in the US. Uh, and although the demand is very strong, people just can't find enough bars and coins. So, that's that's that's holding back uh investment flows there. If you look at the ETFs, as I said, they're broadly unchanged for this year. Uh, but in terms of the step down in total investment demand for next year, it it's not really on the physical side. In fact, we've we've got continued demand strength there. It's really in those ETF profit taking and the exchange stock outflows that I highlighted earlier. >> Okay. I think that makes a lot of sense. And I'm glad you brought up China because I wanted to ask you about that as well in relation to platinum jewelry. So, we've seen this this big increase in platinum from China. Can you can you go over what that might be related to? Is this because of high gold price? Is there something else that's going on there? What are you seeing driving that interest in China right now? I look it's very it's very much linked to a combination of high gold prices and I think you know just a flight to hard assets basically. So in terms of in terms of investment demand that's been a big motivation in terms of jewelry it's a little bit more nuanced. So um gold jewelry sales have fallen quite significantly because of the high gold price. uh and so the the the wholesalers have been looking to compensate for that by offering alternative and lower cost products to their customer base and platinum as being a big big big part of that. I would say that we probably the market probably got a little bit over excited about the potential for this in the in the second quarter. Um you could see there was a significant increase in the number of wholesalers offering platinum jewelry, lots and lots of restocking. So the Q2 numbers for China jewelry demand uh are really quite significant. Um but we've seen a bit of a reset since then. For this year as a whole for China, we're still expecting, you know, good double digit growth in jewelry demand. Um but probably not at the pace that people were getting um enthusiastic about earlier in the year. And I think that'll broadly look to continue into into 2026. A key thing for the platinum jewelry market in China though is that it's it's it it's very much a yellow gold, you know, yellow metal type market. And so a certain amount of effort needs to be put into educating consumers, advertising and so on in order to um you know, to really capitalize on on this opportunity and to and to maximize the potential for for platinum uh jewelry demand there. And that just takes time. you know, it'll come come in due course, but um expecting a market to transform overnight is is, you know, probably overly optimistic. >> Yeah, absolutely. I think these these things take time and I I often and am honing in on the investment and jewelry side, but anything you would add on auto and industrial demand either in 2025 or factors you would pull out to watch in 2026 for platinum? I think just high level I mean automotive demand um is actually just continuing to be higher for longer really. You know we've obviously got the the the drivetrain um transition towards electrification that's going to continue. You know we think it's going to be at a fairly slow pace but if you look at um for example automotive demand for platinum plus palladium and projected out over a longer time period we've only got about a negative 1.7% kagger over the next 5 years. So pretty modest uh pace of decline in terms of industrial demand. This year was actually a bit of a low year for industrial demand from a or was expected to be from a cyclical perspective. We've just over the last four or five years we've had significant capacity additions in the glass industry um that have been a big draw for platinum demand there. And this year we're just we're just seeing fewer new new facilities being constructed. We are expecting that to begin to return uh towards growth from next year. So um so we do see a step up in industrial demand next year but it is very much dependent upon the timing of new facilities opening uh be that glass chemicals uh petroleum refining and so on. Um so but look I think you know slow and steady growth if you look at industrial demand going back to 2013 I mean it's averaged about a 3% kagger over that over over the time period from then um but you do get quite a lot of volatility on a year-to-year basis. >> Thank you for for going over that as well. And I want to make sure we touch on supply as well. So mine supply looks like it's going to be down 5% in 2025. And I feel like every time we talk, we we speak about the challenges that the miners are facing when it comes to platinum. So I'm wondering if you can talk about the the challenges they might have faced this past year and whether you see those persisting into next year as well. >> Well, I think I think a lot of the challenges for the existing production uh you know probably are being solved to a degree by price. you know, we've we've seen prices increase for all of the PGMs. Uh, and certainly that just puts the miners in in a more robust position. Um, and you know, the story over the last few years has been basically restructuring production to accommodate for higher for lower prices. You know, that that environment has changed, but I wouldn't expect any growth. And you know the main thing we're we're dealing with here is that these are deep level underground mines for the most part and they're not mines that you can flex output from rapidly. So you'd need to see you know sustained uh strength in prices across the PGM landscape not just for platinum for for you know probably for a few years before you began to see meaningful investment decisions in terms of increasing output. And I think that you know then delivering on that uh investment will take a few few years more as well. So you know realistically mine supply is likely to be at or around current levels for you know for the foreseeable future from an investment time frame perspective in in terms of capital markets. Um it's probably worth touching on recycling supply though. So recycling supply is um more price elastic than than mine supply. So we are expecting a reasonable increase in recycling supply volumes coming through into next year. That's really driven by automotive and a little bit by uh jewelry recycling as well. Um but fundamentally there's still some constraints on on the on the level at which recycling supply can increase. So there's still a bit of a shortage of end of life vehicles. You've got some uh you know financial considerations in terms of credit lines in in certain geographies like the US that need to be solved before we see a significant increase. Um but you know I think recycling supply we can probably expect a reasonable uh sort of healthy growth uh over the next few years and that's baked into our base coast forecast I should say and has been has been for a while. >> Yeah I think I remember you told us previously even though prices go up there's only a certain degree to which the recycling can respond. So good to go over both of those aspects of supply and I'm wondering if we put all of this together the demand and the supply side. I know you aren't a a price predicting firm, but I'm wondering what you can say about price looking forward into 2026. It's been an exciting year. I think people are are hoping it will continue. Anything that you could say? >> Well, I think there's probably a couple of things now. As you as you mentioned, you know, we we because of the type of organization we are, we can't forecast prices, but what I would say is that, you know, the price rally we've seen this year has not solved a deficit. You know, normally in a in a deficit market, you'd expect the price to increase until you either incentivize more supply into the market or you disincentivize demand. And that just simply hasn't happened despite the big price increase. So clearly the the kind of elevated prices that we've reached uh are still insufficient to attract more supply into the market or drag more metal out of above ground stocks. Um and so that's probably something just to kind of think about when looking looking ahead to 2026. Uh the other thing on on price I should probably highlight is that the new futures exchange the Guangju futures exchange has launched in China started trading last Wednesday and we're seeing some pretty significant volumes uh transact on that even though it's only just uh just opened um and you know that's open to uh investors in China to to access through brokers. So just thinking about you know the kind of uh China being the biggest market for PGMs globally uh but has very much been um sort of more of a price taker than a price setter you know clearly with the futures market opening up there the the future outlook for Chinese uh platinum demand and palladium demand you know can begin to be factored into international price discovery um which may be something to uh to keep an eye on going into 2026. Well, and I think that that blends into a question I wanted to ask before I let you go, which is how is the investment case for platinum looking to you? And I think for me, just after having this conversation, it's a lot stronger than I thought it was hearing about the market coming into balance and the deficit going away. But how how would you sum it up right now for people who might be looking at the sector? >> Look, I think the underlying fundamentals are still really robust. Uh from a a structural perspective, we would still be forecasting a deficit for next year um if it weren't for the fact that we're assuming that there's some profit taking from ETFs and you know some easing of trade tension to allow uh the the exchange stock outflows to come through. If that doesn't happen, like I said, it's still a deep deficit for next year. Um we've got a pretty robust demand outlook. Uh and frankly, even though we are expecting a bit of a recovery in recycling supply, the overall picture is very constrained. >> Well, I think that that sums it up very well. So, I I'll let you go. We've got a lot of points to be looking forward to next year. Unless you had any final thoughts that you would leave people with right now. >> I think we've covered off most things. Charlotte, >> we've done it. Okay. Well, thank you so much. Great to have you. I'm sure we'll be checking back with you early next year. For now, I'm Charlotte Mloud with investingnews.com and this is Edward Sturk with the World Platinum Investment Council. Thank you for watching. [music] 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 [music] a comment below. [music]
Edward Sterck: Platinum in "Deep Deficit" Again, Will Price Keep Rising in 2026?
Summary
Transcript
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, thanks for inviting me on again. It's um it's good to good to catch up and uh to talk all things platinum, >> of course. And as usual, we're going to be going through the World Platinum Investment Council's latest quarterly report. And it's an exciting one because we get to look back at 2025 as well as forward into 2026. So definitely we want to get over to the 2026 outlook. But before we do that, I was hoping we could take a look back at the year that we've had so far and just get your overall thoughts how you would sum up 2025 for Platinum because it's been quite an interesting year. >> It certainly has been. Um, so from a supply demand perspective, you know, I think it would be fair to say that it's the third consecutive year of a pretty deep and substantial deficit. 692,000 ounces is our forecast for the deficit for the full year. Um, as a reminder, the total size of the uh of the of annual demand is just shy of 8 million ounces. So, you know, fairly meaningful uh shortfall. It's really been a year that's been characterized by a lack of supply more than by demand growth, though. So in fact if you look at if you look at demand total demand was actually down a fair bit year on year or was expected to be um but it's really just that supply is is um by far and away uh falling short of of of annual demand requirements and so um uh hence we have the deficit. I think you know obviously from a a look back perspective what's been uh you know pretty hard to avoid this year has been the price action. So, you know, really coming into May, uh, London Platinum week, uh, that was really the beginning of of the of the price rally. And at one point, we were up 88% year to date. It was the strongest performing uh, commodity across the spectrum for a while. I think silver's eclipsed it recently. Obviously, quite a lot of news going on there. Um, but overall, we've had a period of price consolidation and price has remained um, extremely robust. You know, what are the factors that are driving that? Well, I think you know firstly third year of big deficits, depletion of above ground stocks uh you know I suppose that they must have fallen to levels that would be considered unsustainably low and so uh you know the the the availability of metal in the spot market has just not been as as liquid as it would have been in the past and so that creates this market tension and one of the other things that is notable about that is that market tension can be seen in things like lease rates. So that's the cost of borrowing metal. um they're at historically elevated levels which again is an indication that there's a shortage of metal in the prompt market. But a second order impact of that is that you know the leasing market is actually really quite significant if you look at it in terms of annual volumes. Remember this is including turnover. So you know it's not it's not you know an ounce per year but the leasing market peaked at about 60 million ounces back in um a few years ago. It's eased a little bit, but on average, it's been about 30 million ounces a year um for the last 5 years uh or thereabouts. But of course, you know, with these extremely elevated lease rates, we're seeing uh you know, we think that we're seeing people change how they own platinum. So rather than leasing it, they're switching towards outright purchases. And the timing for that looks like it also coincided with kind of around the the sort of May June time, which is when we began to see this um you know, this strong price action come through. So, a lot of interesting things, you know, I think um we're still seeing we still see that market tension in the market. So, you still got elevated lease rates. You've still got strong backquidation in the London OTC market and so it just looks like these tight mark market conditions are set to persist. >> Well, I think that's a great review of 2025 and we can now start to take a look forward at the next year. And one thing that really stood out to me when looking at the report from the World Platinum Investment Council is that next year the market actually after these three years of deficit starts to come into balance. But it sounds like from what you've been saying what's in the report there's there's a little bit of nuance to that because people people might look at that and think that means lower prices etc. So how how would you characterize the market in 2026 keeping in mind that it comes into balance? So, we've got a uh a tiny surplus for next year in our numbers. So, 20,000 ounces um as you said, you know, that's effectively a market imbalance. I think it's probably worth um bearing in mind a kind of a few things. So, firstly, [clears throat] excuse me, firstly, it is contingent upon um some profit taking from ETFs. So if you look at our numbers, uh we're expecting 170,000 ounces of profit taking from ETFs uh in 2026, which is obviously going to be contingent in itself on on on a high platinum price. I would say that there is probably a bit of a a risk associated with that outlook. So um you know, this year for example, ETF holdings have been broadly unchanged and that's despite the fact we've had this tremendous price rally. So, you know, it certainly feels as though um you know, the motivation for the holders of those ETFs is um is perhaps pivotal on, you know, expecting even higher platinum prices than we've seen um so far this year. The second area where um you know, the deficit or the surplus of 20,000 ounces contingent on is on 150,000 ounces flowing out of CME exchange stock inventories and being made available to the market. Now, if we don't have that ETF profit taking and we don't have the CME inventory unwind, then we remain in a deficit, a quite substantial deficit of approaching 400,000 ounces for 2026. You know, so there are some nuances to this. The other thing to bear in mind in terms of a balanced market is actually a balanced market doesn't solve for the fact we've had three years of deficits. it doesn't in any way um you know I suppose rebuild above ground stocks and it's the shortage of above ground stocks that seems to been one of the major catalysts behind this price action and behind the market tightness. So I think a balanced market is is one where um you know clearly it's not in as deep a deficit as as we forecast for for this year. Um but certainly it doesn't mean that the market tightness the shortage of metal in the market is going to be solved. So definitely it sounds like there is is some nuance there and factors to watch next year. The other thing I was getting from the report is that the market outlook is contingent on what we see happening with trade tensions. So I think we've talked a lot over the course of this past year about tariffs and everything going on there. So what are you going to be keeping an eye on this coming year in in that regard? >> Well, it's a you know it is a really interesting area. So you've got you've got um broadly speaking, you know, two different aspects to um to the trade t tensions that are mainly being driven by the US of course. Uh and it's worth noting that, you know, when I mentioned that we our forecast in terms of a balanced market for next year is contingent upon exchange stock outflows, making that metal available is in of itself um likely to be a function of an easing of of of you know tariff fears in the in the US. So effectively if we look at the US landscape and you've got two investigations that are ongoing at the moment. You've got the section 232 investigation into critical minerals which includes the PGMs that was started by the Trump administration back in uh I think it was early July and then you've got a separate totally separate and unrelated investigation into alleged dumping of Russian origin palladium into the US market. Um and as a result of the fact these are two separate uh uh investigations, we kind of need to look at them um separately really. So starting with the section 232 investigation in effect this is looking at uh the supply of critical minerals from outside of the US and whether that supply presents a threat to national security. Now there's a number of different um sort of ways of testing that but but but the threshold for for concluding or affirming that it is a threat to national security can be pretty low. So for example it can be as little as you know are are these foreign imports um damaging the US domestic industry to the point where the domestic supply of these materials would not be available during a period of an emergency when the US might lose access to international markets. So, that's a pretty low bar to set. The other thing to bear in mind is that um you know, this investigation is probably being uh conducted by um sort of fairly mid-level bureaucrats. And given you've got a relatively sort of hostile environment in the US between the White House and uh and various parts of the federal government, you know, it's quite possible that actually the simple solution for the person running these investigations is to go, I'll just conclude that it is a threat to national security because ultimately once that happens, the report is sent to the president and it's at his sole discretion as to whether he takes on board the uh the recommendations in the report or whether he chooses to ignore them. Uh and to give you an example of this, back in 2019 during Trump's first presidency, uh there was a section 232 investigation into uranium supply uh for the civilian nuclear industry uh that concluded that foreign imports were a threat to national security, but Trump chose to ignore it. Uh I would note though that back then roughly 40% of US uranium imports came via Russia and the relationship between uh the Trump administration and Russia was probably a bit different back then to to that which it is today. So in terms of the the the outcomes from the section 232, if you look again at that uranium one, they recommended a combination of import search charges uh and uh scaling import quotas over time in order to try and make the US domestic industry more robust and and better able to to supply its own needs. So that's possible possibly one of the outcomes that we might expect to see when this investigation becomes public. Obviously whether Trump chooses to uh to accept the recommendations or if he chooses to ignore it, you know, that I think is is probably harder to judge. [snorts] Then if you turn to the palladium anti-dumping investigation, the US ITC has already determined that uh Russia has been dumping palladium into the market at uh uncompetitive rates and that's been uh helped by some form of state subsidies. Now, I'm not sure I totally agree with all those findings, but that doesn't really matter because they've made a judgment that there is uncompetitive practice. The next step of the process is to determine what action to take. Uh, and again, that could be some kind of import duty or search charge and Russian origin palladium or it could be some form of quota. Now, obviously for platinum there is a there is a feed through impact here because there is an element of substitution that can occur between platinum and palladium and catalytic converters. So, you know, it is something to watch. The dates for the uh the initial decisions, I think, are the 29th of December and the 6th of January on this. Um, but it's possible those dates may be pushed back due to the government shutdown that that has obviously now ended, but has probably caused some delays. So, I think, yeah, going into next year, um, we should get greater clarity on both of these investigations and it's certainly something that we'll be watching in terms of trying to inform our estimates for 2026 as a whole. Those will be great points to follow up on next year and really good to go into the comparison to the uranium 232 investigation. I know our audience is very familiar with uranium, so some of that will will probably be carrying over there. I also wanted to ask you if you could break down what we see happening in platinum investment demand. It looks like it is going to come in at a 5-year high for 2025, but there's there's multiple different components there. I know you've talked a little bit about some of them already, but the situation seems to then change in 2026, so that's a little bit different, too. What would you pull out there for for investors to be aware of? >> Well, in terms of physical bar and coin demand, um, this year has been very much characterized by significant strength and demand out of China. So the Chinese market has just been growing um you know basically from more or less zero back in 2019 um to becoming the biggest market in the world for platinum investments products um uh and you know I think that momentum is likely to continue um but maybe not at quite the same sort of pace going into 2026. In contrast to that, one of the challenges in other markets and the US would be um you know one to focus on here probably is that the high lease rates have meant that manufacturing uh platinum investment products has just simply become too expensive. Um you'd have to charge too big a premium to the buyer to to to be able to compensate for the high lease rates because the the bar fabricators, the coin fabricators often don't own the metal. They just lease it and then they close that lease out when they sell the investment product. Um, and that now has just, like I said, it's just become too expensive. So, there's a shortage of of there's a shortage of product in the US. Uh, and although the demand is very strong, people just can't find enough bars and coins. So, that's that's that's holding back uh investment flows there. If you look at the ETFs, as I said, they're broadly unchanged for this year. Uh, but in terms of the step down in total investment demand for next year, it it's not really on the physical side. In fact, we've we've got continued demand strength there. It's really in those ETF profit taking and the exchange stock outflows that I highlighted earlier. >> Okay. I think that makes a lot of sense. And I'm glad you brought up China because I wanted to ask you about that as well in relation to platinum jewelry. So, we've seen this this big increase in platinum from China. Can you can you go over what that might be related to? Is this because of high gold price? Is there something else that's going on there? What are you seeing driving that interest in China right now? I look it's very it's very much linked to a combination of high gold prices and I think you know just a flight to hard assets basically. So in terms of in terms of investment demand that's been a big motivation in terms of jewelry it's a little bit more nuanced. So um gold jewelry sales have fallen quite significantly because of the high gold price. uh and so the the the wholesalers have been looking to compensate for that by offering alternative and lower cost products to their customer base and platinum as being a big big big part of that. I would say that we probably the market probably got a little bit over excited about the potential for this in the in the second quarter. Um you could see there was a significant increase in the number of wholesalers offering platinum jewelry, lots and lots of restocking. So the Q2 numbers for China jewelry demand uh are really quite significant. Um but we've seen a bit of a reset since then. For this year as a whole for China, we're still expecting, you know, good double digit growth in jewelry demand. Um but probably not at the pace that people were getting um enthusiastic about earlier in the year. And I think that'll broadly look to continue into into 2026. A key thing for the platinum jewelry market in China though is that it's it's it it's very much a yellow gold, you know, yellow metal type market. And so a certain amount of effort needs to be put into educating consumers, advertising and so on in order to um you know, to really capitalize on on this opportunity and to and to maximize the potential for for platinum uh jewelry demand there. And that just takes time. you know, it'll come come in due course, but um expecting a market to transform overnight is is, you know, probably overly optimistic. >> Yeah, absolutely. I think these these things take time and I I often and am honing in on the investment and jewelry side, but anything you would add on auto and industrial demand either in 2025 or factors you would pull out to watch in 2026 for platinum? I think just high level I mean automotive demand um is actually just continuing to be higher for longer really. You know we've obviously got the the the drivetrain um transition towards electrification that's going to continue. You know we think it's going to be at a fairly slow pace but if you look at um for example automotive demand for platinum plus palladium and projected out over a longer time period we've only got about a negative 1.7% kagger over the next 5 years. So pretty modest uh pace of decline in terms of industrial demand. This year was actually a bit of a low year for industrial demand from a or was expected to be from a cyclical perspective. We've just over the last four or five years we've had significant capacity additions in the glass industry um that have been a big draw for platinum demand there. And this year we're just we're just seeing fewer new new facilities being constructed. We are expecting that to begin to return uh towards growth from next year. So um so we do see a step up in industrial demand next year but it is very much dependent upon the timing of new facilities opening uh be that glass chemicals uh petroleum refining and so on. Um so but look I think you know slow and steady growth if you look at industrial demand going back to 2013 I mean it's averaged about a 3% kagger over that over over the time period from then um but you do get quite a lot of volatility on a year-to-year basis. >> Thank you for for going over that as well. And I want to make sure we touch on supply as well. So mine supply looks like it's going to be down 5% in 2025. And I feel like every time we talk, we we speak about the challenges that the miners are facing when it comes to platinum. So I'm wondering if you can talk about the the challenges they might have faced this past year and whether you see those persisting into next year as well. >> Well, I think I think a lot of the challenges for the existing production uh you know probably are being solved to a degree by price. you know, we've we've seen prices increase for all of the PGMs. Uh, and certainly that just puts the miners in in a more robust position. Um, and you know, the story over the last few years has been basically restructuring production to accommodate for higher for lower prices. You know, that that environment has changed, but I wouldn't expect any growth. And you know the main thing we're we're dealing with here is that these are deep level underground mines for the most part and they're not mines that you can flex output from rapidly. So you'd need to see you know sustained uh strength in prices across the PGM landscape not just for platinum for for you know probably for a few years before you began to see meaningful investment decisions in terms of increasing output. And I think that you know then delivering on that uh investment will take a few few years more as well. So you know realistically mine supply is likely to be at or around current levels for you know for the foreseeable future from an investment time frame perspective in in terms of capital markets. Um it's probably worth touching on recycling supply though. So recycling supply is um more price elastic than than mine supply. So we are expecting a reasonable increase in recycling supply volumes coming through into next year. That's really driven by automotive and a little bit by uh jewelry recycling as well. Um but fundamentally there's still some constraints on on the on the level at which recycling supply can increase. So there's still a bit of a shortage of end of life vehicles. You've got some uh you know financial considerations in terms of credit lines in in certain geographies like the US that need to be solved before we see a significant increase. Um but you know I think recycling supply we can probably expect a reasonable uh sort of healthy growth uh over the next few years and that's baked into our base coast forecast I should say and has been has been for a while. >> Yeah I think I remember you told us previously even though prices go up there's only a certain degree to which the recycling can respond. So good to go over both of those aspects of supply and I'm wondering if we put all of this together the demand and the supply side. I know you aren't a a price predicting firm, but I'm wondering what you can say about price looking forward into 2026. It's been an exciting year. I think people are are hoping it will continue. Anything that you could say? >> Well, I think there's probably a couple of things now. As you as you mentioned, you know, we we because of the type of organization we are, we can't forecast prices, but what I would say is that, you know, the price rally we've seen this year has not solved a deficit. You know, normally in a in a deficit market, you'd expect the price to increase until you either incentivize more supply into the market or you disincentivize demand. And that just simply hasn't happened despite the big price increase. So clearly the the kind of elevated prices that we've reached uh are still insufficient to attract more supply into the market or drag more metal out of above ground stocks. Um and so that's probably something just to kind of think about when looking looking ahead to 2026. Uh the other thing on on price I should probably highlight is that the new futures exchange the Guangju futures exchange has launched in China started trading last Wednesday and we're seeing some pretty significant volumes uh transact on that even though it's only just uh just opened um and you know that's open to uh investors in China to to access through brokers. So just thinking about you know the kind of uh China being the biggest market for PGMs globally uh but has very much been um sort of more of a price taker than a price setter you know clearly with the futures market opening up there the the future outlook for Chinese uh platinum demand and palladium demand you know can begin to be factored into international price discovery um which may be something to uh to keep an eye on going into 2026. Well, and I think that that blends into a question I wanted to ask before I let you go, which is how is the investment case for platinum looking to you? And I think for me, just after having this conversation, it's a lot stronger than I thought it was hearing about the market coming into balance and the deficit going away. But how how would you sum it up right now for people who might be looking at the sector? >> Look, I think the underlying fundamentals are still really robust. Uh from a a structural perspective, we would still be forecasting a deficit for next year um if it weren't for the fact that we're assuming that there's some profit taking from ETFs and you know some easing of trade tension to allow uh the the exchange stock outflows to come through. If that doesn't happen, like I said, it's still a deep deficit for next year. Um we've got a pretty robust demand outlook. Uh and frankly, even though we are expecting a bit of a recovery in recycling supply, the overall picture is very constrained. >> Well, I think that that sums it up very well. So, I I'll let you go. We've got a lot of points to be looking forward to next year. Unless you had any final thoughts that you would leave people with right now. >> I think we've covered off most things. Charlotte, >> we've done it. Okay. Well, thank you so much. Great to have you. I'm sure we'll be checking back with you early next year. For now, I'm Charlotte Mloud with investingnews.com and this is Edward Sturk with the World Platinum Investment Council. Thank you for watching. [music] 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 [music] a comment below. [music]