Platinum’s supply is at a five-year low mainly because the market is experiencing a persistent and structural deficit. This means that the amount of platinum being produced and recycled is not enough to meet demand, leading to tighter supplies than seen in recent years.
One key reason for this shortage is a drop in mine production, especially from South Africa, which is the world’s largest platinum producer. The prices of platinum have been relatively weak for some time, forcing mining companies to cut back on output from deep and costly shafts that are expensive to operate. These mines were already barely profitable, so when prices dipped, producers scaled back or paused production altogether.
Recycling has also contributed less supply than before. A significant portion of recycled platinum comes from used car catalytic converters. However, with rising used car prices and people holding onto their vehicles longer—especially in places like the United States where the average vehicle age has reached over 12 years—there are fewer old cars being scrapped for recycling. This reduces the flow of recycled platinum back into the market.
At the same time, demand remains strong across various sectors such as automotive (for catalytic converters), jewelry (particularly in Asia), hydrogen fuel cells, chemical processes, and glass manufacturing. Chinese demand has notably increased recently with record monthly imports signaling growing industrial use and investment interest.
The combination of reduced mine output due to economic pressures on producers plus lower recycling rates creates a structural deficit that depletes above-ground stocks of platinum significantly. These stocks are now at unsustainably low levels—barely enough to cover three months’ worth of global demand—which tightens supply even further.
This scarcity drives up lease rates for physical platinum as users try to borrow metal temporarily rather than buy it outright due to high costs. Elevated lease rates reflect how hard it is currently to source physical metal easily on the market.
Geopolitical tensions also add uncertainty around supply chains which can exacerbate fears about availability and push prices higher still.
In short: Platinum’s five-year low supply results from mining cutbacks driven by price weakness making extraction uneconomical; fewer vehicles being scrapped reducing recycled metal; steady or rising industrial demand especially from China; shrinking above-ground inventories; plus geopolitical risks tightening overall availability—all combining into one tight market with persistent deficits year after year.