Platinum’s supply chain is under intense pressure due to a combination of persistent production challenges and rising demand, creating a significant imbalance in the market.
The heart of the problem lies in South Africa, which supplies about 75% of the world’s platinum. The country faces ongoing issues such as chronic electricity shortages that disrupt mining operations, frequent labor disputes that halt production, and tough regulatory environments that slow down expansion or new projects. These factors have caused platinum output to decline steadily—by around 6% annually—making it difficult for supply to keep pace with growing global needs.
Adding to this strain is the lack of new mines coming online. Platinum deposits are rare and expensive to develop, so fresh sources cannot quickly fill the gap left by declining production from existing mines. Recycling helps but only accounts for about a quarter of total supply; it cannot compensate fully for falling primary output.
On the demand side, several forces are driving consumption higher. Industrial uses are expanding rapidly—especially in China where platinum imports surged by over 20% year-on-year recently. Chinese consumers are also shifting toward platinum jewelry as gold prices remain high, further boosting demand.
Perhaps most importantly for future growth is platinum’s critical role in green technologies like hydrogen fuel cells and electrolyzers used for clean energy projects. China has ambitious plans aiming at one million fuel-cell vehicles by 2030 and large-scale green hydrogen plants requiring substantial amounts of platinum catalysts.
Because aboveground inventories—the stockpiles held outside mines—are shrinking fast (down to just a few months’ worth of global demand), any disruption or spike in usage risks triggering sharp price increases. This tight supply-demand balance has already pushed platinum prices up significantly this year compared with other precious metals.
In short, platinum’s supply chain struggles stem from entrenched mining difficulties combined with surging industrial and investment interest worldwide. Without major breakthroughs on either front soon, these pressures will likely continue shaping an increasingly constrained market environment where every ounce counts.