Platinum has experienced extraordinary volatility in recent times. A year ago, it traded at $1,192 per ounce, before rallying to $2,819, and eventually settling below $2,000.



Valterra Platinum (OTCPK: ANGPY) is down 6.86% year-to-date.



Yet, despite the market seemingly selling every rally, industry experts remain constructive on the long-term outlook. Supply deficits remain persistent, and a broadening demand base continues to extend well beyond traditional automotive applications.



<h2>Near-Term Surpluses vs. Structural Deficits</h2>



According to the World Platinum Investment Council (WPIC), the platinum market recorded a rare surplus in the first quarter. The 268,000-ounce surplus was the first one in six quarters.



A conflict in Iran drove widespread investor liquidations as traders sought cash. Meanwhile, concerns regarding energy prices, inflation, and interest rates amplified the decline.



Supply also received a boost. Total availability rose by 18% compared to the first quarter of 2025, as key South African mining operations recovered from disruptions. Mine supply grew by 22%, while higher prices encouraged additional recycling, pushing the secondary supply up by 7%.



Yet, WPIC is not impressed. The organization still sees structural undersupply, raising the projected deficit from 240,000 to 297,000 for the fourth consecutive year of shortages.



The inventory picture reinforces that bullish view. Above-ground vaulted stocks could fall by 15% to just 1.7 million ounces by year-end. That number is less than 3 months of global demand cover.



<h2>Evolving Demand and Investor Psychology</h2>



While tightening fundamentals support the market, SFA (Oxford) CEO Henk de Hoop believes investor behavior has become an equally important factor.



Historically, platinum investment demand was highly cyclical, with physical holders often selling aggressively during price declines. In an interview for Mining Weekly, De Hoop argues the dynamic is changing.



“The investment angle for platinum is getting stronger and stronger, and we’re not going to get this ride down to the same extent as what we had in the past,” he said, discussing investors from Japan and China.



Growing macroeconomic uncertainty is the key reason. Stock market volatility and elevated geopolitical risk push investors to hold onto physical platinum. It becomes a diversification asset rather than a short-term trade.



The investment case is spreading beyond platinum itself. According to De Hoop, up to half of some ruthenium imports into China may now be destined for investment purposes rather than industrial consumption.



<h2>New Demand Drivers</h2>



Battery electric vehicles remain a long-term challenge for demand, but De Hoop estimates that internal combustion and hybrid vehicles will still stick around. He sees a 40% decline in automotive platinum demand to about one-third of total consumption a decade from now.



Meanwhile, emerging technologies are promising. China’s push into hydrogen infrastructure could become a notable factor, as heavy-duty hydrogen fuel-cell vehicles can require 2-3 ounces of platinum per truck.



“If it will succeed somewhere, it will be in China, and that’s the one we follow closely,” he noted.



Artificial intelligence infrastructure is also becoming an increasingly important driver of demand. Platinum group metals are essential in producing specialty crystals used in semiconductors, optical communications systems, and data centers.



Still, De Hoop warns that investors should not ignore macroeconomic risks.



“We have one of the most important channels for commodity transfers, Hormuz, still closed,” he said, noting that disruptions to energy, fertilizer, and industrial supply chains are creating inflationary pressures and weighing on global growth expectations.



Slower economic growth and weaker automotive sales could eventually affect PGM demand. Even so, such weaknesses should be short-term, as structural deficits, declining inventory, increasing investment demand, and emerging industrial applications support the long-term outlook.



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Despite recent volatility, experts remain bullish on platinum due to persistent structural deficits and evolving demand. While Q1 saw a temporary surplus from South African supply recovery, WPIC projects continued undersupply through year-end with declining inventories. Demand is shifting beyond automotive to hydrogen fuel cells and AI infrastructure, while geopolitical uncertainty drives investment demand for physical holdings, supporting long-term value.

Why Experts Are Bullish On Platinum Despite Market Shocks