Platinum is facing a serious supply squeeze right now, and it’s starting to look quite tight. The market is dealing with its third straight year of significant supply deficits, with the shortfall expected to hit nearly one million ounces in 2025. That’s about 12% less than what the world demands annually—a huge gap for such a rare metal.
Why is this happening? First off, mining output is dropping. South Africa, which produces most of the world’s platinum, has seen production fall by around 6% this year. There are no major new mines coming online to fill that gap either. On top of that, recycling isn’t helping much; only about a quarter of platinum supply comes from recycled sources like catalytic converters. So when mining slows and recycling stays limited, total supply shrinks.
Meanwhile, demand isn’t slowing down—in fact, it’s growing across several fronts. Automakers still need platinum for catalytic converters in gasoline and hybrid vehicles since electric cars don’t use as much yet. Jewelry demand is rising too, especially in China where imports have surged sharply recently as investors look for alternatives to gold amid its high prices. Industrial uses and investment interest are also pushing demand higher.
Because supply can’t keep up with this rising appetite for platinum—and above-ground inventories are shrinking fast—the market feels tight enough that prices have jumped over 20% so far this year alone. Platinum recently hit levels not seen in five years and could climb even higher if these trends continue.
The big picture shows a metal caught between falling production and climbing demand without any quick fixes on the horizon—meaning the squeeze could get worse before it gets better. This situation might soon force prices into another leg up as buyers compete over limited supplies while stocks dwindle toward critically low levels globally.
So how bad is it? Pretty serious: persistent deficits threaten to drain reserves within just a few years if nothing changes significantly on either side of the equation—making platinum one of the most tightly supplied precious metals markets today with strong potential for further price gains ahead.