Shares in platinum group metal (PGM) miners resumed a downward trend at the start of the week as tension in the Strait of Hormuz continued to stoke inflation fears.
Valterra Platinum has lost more than R100bn, over a fifth of its market cap, in the wake of the Iran war, while Impala Platinum has shed R96bn, more than 30% of its value, since end-February.
Like gold, platinum has been caught in the crossfire of the war, declining more than 13% since the first US-Israeli strikes as investors dump commodities for cash and bonds.
According to the World Platinum Investment Council, higher energy prices pose a threat to platinum prices at the consumer and investor level.
On the consumer side, rising oil prices ― particularly in the case of a prolonged conflict ― could add incentive to shift from internal combustion engines, the main source of demand for PGMs, to electric vehicles.
While a welcome move for the world’s transition to greener energy sources, this could wipe out about 35,000oz of platinum demand in 2026.
As central banks revise their inflation outlooks and hold back on rate cuts, cash-strapped consumers may simply hold back on buying cars. This, too, would pressure vehicle demand for platinum.
Energy prices are a core driver of inflation. As the price of oil remains elevated, hovering above $100 a barrel on Monday, the US Federal Reserve is no longer expected to cut interest rates this year.
Even if peace talks hold, the war’s damage to energy infrastructure, such as Qatar’s liquefied natural gas terminals, could take years to repair, putting prolonged pressure on energy markets and car buyers in turn.
Prolonged conflict in the Middle East also has some direct implications for platinum consumption, with the region accounting for about 2.5% of global demand.
But the more immediate threat to platinum markets is the impact of interest rate expectations and a stronger US dollar on investor demand, said the council.
“The primary risk to demand stems from the potential for investors to liquidate positions as rising interest rate expectations and a recovering US dollar weigh on broader metals prices,” reads a recent note.
In March, platinum ETF holdings, a key source of investment demand, plunged by 224,000oz, according to the council’s estimates.
This is about the same size as the overall deficit ― the amount by which demand exceeds supply ― which the council expects during 2026.
Still, the metal’s discount to gold, which continues to trade at more than twice the price of platinum despite a recent war-related sell-off, offers hope that investors will continue to buy the metal as a hedge against geopolitical uncertainty.
“We currently do not believe that auto or industrial platinum demand would cumulatively reduce enough to erode our current deficit of 240,000oz in 2026, but recent investor positioning has been more impactful.
“The second-order effects that the Iran war has had on interest rate expectations have led investors to liquidate some ETF holdings in March 2026.”