Platinum Market Outlook to 2025: UBS By Investing.com
Investing.com — UBS has issued its market outlook for platinum group metals (PGMS), forecasting it will outperform in 2025, though both are expected to lag behind.
The report suggests that industrial activity will be a major factor driving the white metal market.
The bank estimates that the central bank’s rate cut and possibly a weak US dollar will have a positive impact on the market, while possible tariffs may pose a negative threat. However, UBS maintains a moderately positive price outlook for platinum, driven in part by the automotive sector.
UBS strategists Giovanni Staunovo and Wayne Gordon said in a note that “car production in 2024 is disappointing, but there is room for improvement if economic activity picks up in 2025.”
Low interest rates are expected to make vehicle purchases more affordable, which, coupled with the need to replace aging vehicles, should support auto-catalyst demand.
Another positive is the slowing pace of vehicle electrification, especially outside of China, which is expected to keep autocatalyst demand high.
UBS forecasts a deficit of 500,000 ounces of platinum, or 6.4% of demand, for 2025, which would mark the third consecutive year of shortages following a deficit of 700,000 ounces in 2025 and 760,000 ounces in 2023.
The bank raises the question of when a reduction in above-ground storage will be enough for prices to reflect market tightness. The World Platinum Investment Council’s current estimate puts these supplies at 3.5 million ounces, while UBS forecasts suggest a decline to 3 million ounces by the end of 2025.
“We think above-ground production should move to a lower market with prices around 2 million ounces,” strategists continued.
They expect lower mineral supply but increased waste supply. While forecasting demand for autocatalysts to pick up, UBS predicts stable decorative demand and a slight decline in industrial demand for the year.
U.S. steel and oil prices rose above global benchmarks this week as traders speculated that President-elect Donald Trump might impose tariffs on imports.
In recent weeks, large price gaps have been seen between the New York and London markets for metals such as silver and platinum. At the same time, the oil price gap between the US and Canada is widening.
These changes reflect uncertainty over the direction of US trade policy under the new administration. Market volatility is creating opportunities for traders to import cheap materials overseas and bring them into the US.