Platinum is facing a serious supply-demand imbalance that is reshaping its market and pushing prices higher. The root of this imbalance lies in a persistent structural deficit, meaning the amount of platinum being produced globally is consistently less than what buyers want to purchase.
On the supply side, about 75% of the world’s platinum comes from just two countries: South Africa and Zimbabwe. Both face significant challenges that limit how much metal they can produce. South Africa struggles with frequent electricity shortages, labor strikes, and aging infrastructure—all factors that have pushed its output down to a 20-year low recently. Zimbabwe adds to the problem by imposing export taxes on raw platinum, which discourages shipments abroad. Overall, total global production is expected to fall below 7 million ounces in 2025.
Recycling used platinum helps supplement supply but only accounts for about a quarter of what’s needed. Moreover, because much of recycled platinum comes from catalytic converters in vehicles—which have long lifespans—the flow of recycled metal isn’t enough to fill the gap left by declining mine output. Above-ground stocks or inventories are shrinking fast too; they are projected to drop to around 2.5 million ounces by year-end and could be depleted within two years if current trends continue.
Demand for platinum is rising sharply at the same time supply tightens. One major driver is stricter environmental regulations like Euro 7 standards coming into effect soon in Europe, which require car manufacturers to use more platinum in catalytic converters to reduce harmful nitrogen oxide emissions from vehicles. This has pushed automotive demand for platinum up to an eight-year high—expected at about 3.25 million ounces this year.
China’s growing appetite for jewelry made with cheaper alternatives like platinum instead of gold also fuels demand growth; imports there jumped roughly 50% year-on-year recently as consumers shift preferences away from gold jewelry toward more affordable options containing white metals like platinum.
Looking ahead, emerging technologies such as green hydrogen fuel cells are set to create even more demand for this precious metal over the next decade—potentially adding millions of ounces annually as industries seek cleaner energy solutions where platinum acts as a key catalyst.
The combination of falling mine production due mainly to geographic risks and operational challenges plus rising industrial and consumer demand creates an ongoing shortage situation—a deficit forecasted near one million ounces again this year alone—and keeps upward pressure on prices.
This tight balance between limited supply growth and expanding consumption means investors see increasing value in owning physical or investment-grade forms of platinum amid fears that above-ground reserves will run out soon without new sources coming online quickly enough.
In short, while global economic uncertainties swirl around other markets including gold or silver, it’s these fundamental forces—supply constraints rooted largely in South African mining issues paired with surging automotive regulations plus new tech demands—that explain why we’re witnessing such strong price gains for platinum today and likely into the foreseeable future.