Although the global economic and industrial “dashboard is littered with red and yellow indicators”, Metals Focus platinum group metals (PGMs) research director Wilma Swarts believes there are long-term upsides to platinum, in particular.

“We are in a very cautionary stage. Confidence is fragile and we have political uncertainty, we have regulatory uncertainty, and all of that plays a part in what we see is happening with the PGM industry, both on the supply side and on the demand side,” she said at the 2025 PGMs Industry Day, in Johannesburg, on April 3.

Swarts provided a forecast that showed platinum prices potentially returning to above $1 000/oz by the end of the year or at least in 2026.

“We are very constructive about platinum. We believe that platinum should break out, maybe not this year. But we do think it's undervalued, and in the longer term, should be the metal to watch,” she said.

Swarts stated that platinum is expected to remain in deficit throughout this year. Above-ground stocks are estimated at about 9.5-million ounces, equivalent to about 15 months of demand, and these are likely to be drawn down.

“We are forecasting that the price could range anything from $900/oz to $1 200/oz during the course of this year,” she added, expressing confidence that platinum prices would ultimately breach and sustain levels above $1 000/oz.

Regarding palladium, Swarts said the market would also remain in deficit, with a shortfall of 380 000 oz projected for this year. Above-ground stocks are estimated at 10.9-million ounces, which are similarly expected to decline.

She said that Metals Focus anticipated palladium trading in the $1 000/oz to $1 200/oz range, with an average price around $1 010/oz.

However, Swarts noted that while the outlook for this year was generally bullish, she was bearish towards the latter part, as electrification began to erode demand. She said palladium was likely to start losing some ground over time.

For rhodium, the projected market deficit stands at 74 000 oz this year, with available above-ground stocks falling below one-million ounces. This equates to about seven months of demand cover.

Swarts noted that this tightness created volatility.

“We think that the metal can trade anything between $4 000/oz to up to $7 000/oz,” she said, noting an average price expectation of about $4 700/oz.

While some of the price forecasts might appear bearish, Swarts stressed that, when adjusted for inflation, she believed that palladium was undervalued, referencing price levels going back to 1996.

Swarts also projected a 5% decline in mine supply for 2025 on a platinum, palladium and rhodium (3E) basis but highlighted that secondary supply now plays an increasingly important role.

She said that Metals Focus expected 27% of total supply to come from secondary sources. However, she noted a disparity between calculated availability of scrap from end-of-life vehicles and actual secondary recovery.

She explained that, since Covid-19, more consumers have kept and maintained older vehicles, reducing scrappage rates.

“Potentially we have scrap yards with vehicles which they are not scrapping. They're hoarding it,” she said.

Swarts noted that past high prices might also be causing some holders to withhold stock.

She also described a “key conundrum” in recycling, highlighting a shift in activity from Western to Eastern markets. In Western regions, the availability of spent catalysts was declining, while China had rapidly expanded its smelting and recycling capacity.

“When metal is refined in China, it generally doesn't leave China,” she noted, which restricts availability in the West and tightens markets by affecting lease rates and liquidity.

Swarts said supply would contract this year. While a slight improvement in secondary supply was expected, primary supply would continue to decline. On a 3E basis, she projected a market deficit of nearly one-million ounces for the year.