After a strong start to the year, Platinum Group Metals (PGMs) have been stuck in a range for the last few months, but according to one research firm, prices across the entire sector are still expected to end the year with solid gains, led by Platinum.
PGM prices are expected to be driven by further fundamental deficits through 2026, with tightening supply, rising investor demand and growing geopolitical fragmentation driving prices sharply higher across the complex, according to British research firm Metals Focus.
In its newly released Platinum Group Metals Focus 2026 report, the analysts forecast platinum prices to average $2,190 an ounce next year, up 71% year-on-year, while palladium is expected to average $1,570, a 37% increase. Rhodium is forecast to rise 62% to $10,200, iridium to climb 64% to $7,200. In the smaller ruthenium market, prices are seen more than doubling to $1,560 an ounce.
The bullish outlook comes as analysts see persistent physical deficits across all five major PGMs, even as electric vehicle adoption continues to erode some automotive demand.
“After several years of rangebound prices, 2025 marked a decisive turning point for platinum group metals,” the analysts said, pointing to tightening physical balances, increasing investor interest and rising concerns over trade disruptions and strategic access policies.
Platinum is expected to post its fourth consecutive annual deficit in 2026, with the market short by 312,000 ounces as above-ground stocks fall to 9 million ounces. Metals Focus said platinum’s dramatic re-rating in 2025 was fueled not only by tightening supply fundamentals but also by a surge in investment demand after the launch of platinum futures on China’s Guangzhou Futures Exchange (GFEX).
Wilma Swarts, Director of PGMs at Metals Focus, said investor flows have become increasingly important in setting prices.
“What has changed markedly is the investor story,” she said. “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.”
The research firm added that geopolitical risks, particularly the threat of a prolonged U.S.-Iran conflict, could continue to support safe-haven buying and strategic stockpiling in 2026.
On the supply side, Metals Focus expects total mine supply to decline another 2.2% in 2026 to 13.9 million ounces, following production disruptions in South Africa and falling North American output. South African operations have been slow to recover after they were hit by flooding in 2025; meanwhile, palladium supply suffered after the Stillwater West mine in the United States was placed on care and maintenance.
Although secondary supply is expected to improve, particularly through stronger autocatalyst recycling, analysts said it will not be enough to offset falling primary production. Recycling of platinum, palladium and rhodium from autocatalysts is forecasted to rise 11% to 4.4 million ounces next year, helped by Chinese scrappage programs and government incentives for domestic refining.
Automotive demand remains a central theme for the sector. Metals Focus said global automotive demand for platinum, palladium and rhodium fell 2% in 2025 to 11.9 million ounces, marking the first drop below 12 million ounces since the semiconductor shortages of 2022. However, analysts noted that internal combustion engine and hybrid vehicles still dominate global production despite rising battery electric vehicle penetration.
Beyond autos, the report highlighted strengthening industrial and investment demand as critical pillars supporting the PGM complex.
Platinum jewelry demand rose 10% in 2025 to a nine-year high of 2.2 million ounces as consumers and manufacturers shifted away from expensive gold. Electronics demand across the PGM sector climbed 8% to 1.3 million ounces, supported by the rapid expansion of artificial intelligence infrastructure and data storage requirements.
Metals Focus also pointed to accelerating hydrogen-sector demand, which jumped 76% in 2025 to 97,000 ounces, as governments and corporations increased commitments to hydrogen technologies.
Among the smaller PGMs, the consultancy said rhodium markets remain exceptionally tight, with above-ground stocks potentially falling below three months of demand cover in 2026. Ruthenium is also expected to remain in deficit as AI-related hard disk drive demand offsets weaker chemical-sector consumption.
Another major driver identified in the report is the increasing regionalization of PGM markets. Metals Focus said policy initiatives such as the U.S. Section 232 proclamation, China’s 15th Five-Year Plan and the European Union’s Critical Raw Materials Act are reshaping supply chains and pricing mechanisms.
“The launch of platinum and palladium futures on the GFEX represents a structural shift in domestic price discovery and investor access, with implications for global market dynamics,” the report said.