Platinum is facing a tough year in 2025, with supply shortages causing ripples across industrial contracts. The metal’s availability is tightening due to several key factors, and this squeeze is reshaping how industries plan and negotiate their platinum needs.
Most of the world’s platinum comes from South Africa and Zimbabwe—two countries grappling with serious challenges. South Africa has been hit by electricity shortages, labor strikes, and aging infrastructure that slow down mining operations. In fact, its production dropped to a 20-year low recently. Meanwhile, Zimbabwe has imposed a 5% export tax on raw platinum, which discourages shipments abroad. These issues mean less metal is coming out of the ground than companies need.
Recycling used platinum helps fill some gaps but only accounts for about a quarter of total supply. Plus, because much of the recycled platinum sits locked inside catalytic converters for years before being recovered, there isn’t enough recycled material flowing back into the market quickly enough to ease shortages.
On top of these supply constraints lies growing demand from several sectors that rely heavily on platinum. Automakers are among the biggest users because they need it for catalytic converters that reduce harmful nitrogen oxide emissions in vehicles—a requirement becoming stricter with new Euro 7 environmental regulations kicking in next year. To meet these rules, car manufacturers are increasing how much platinum they use per vehicle.
China also plays a big role in boosting demand as consumers there have shifted toward buying more affordable platinum jewelry instead of gold—imports jumped by half compared to last year alone.
Looking ahead beyond immediate industrial uses, green energy technologies like hydrogen fuel cells depend on platinum as well. The push toward cleaner energy sources means demand from this sector could reach millions of ounces annually within just a few years.
All these factors combined create an ongoing deficit expected to approach nearly one million ounces this year alone—the third straight year where supply falls short of demand by a wide margin.
For companies locking down industrial contracts involving platinum today, this means higher prices and tighter terms are becoming standard as suppliers struggle to guarantee steady deliveries amid shrinking inventories worldwide. Buyers must plan carefully: securing long-term agreements or exploring alternative materials might be necessary strategies when faced with such constrained availability.
In essence, 2025 marks another challenging chapter for anyone relying on platinum—not just because it’s harder to get but also because its critical role across industries keeps pushing demand ever higher while mines produce less than needed. This dynamic will continue shaping contract negotiations throughout the year as markets adjust to what looks like sustained tightness in global supply chains for this precious metal.