Platinum is facing a serious supply squeeze in 2025, and this is pushing spot prices higher. The main reason for this squeeze is that the amount of newly mined platinum is expected to drop by about 6% this year, reversing the growth seen last year. This decline in supply comes mostly from challenges in mining operations, especially in South Africa, which produces the majority of the world’s platinum.
At the same time, demand for platinum is rising strongly across several areas. Automotive manufacturers are using more platinum in hybrid vehicles and catalytic converters. Jewelry demand, particularly from China, has surged as investors there buy more platinum bars and coins as an alternative to gold. Industrial uses also continue to support strong demand.
Because supply cannot keep up with this growing demand—and recycling rates remain low—the market faces a significant deficit estimated at nearly one million ounces for 2025 alone. This means that more platinum is being used than produced or recycled each year.
This ongoing shortage has caused above-ground stocks (the reserves held outside mines) to shrink sharply—down about 25%—leaving less than four months’ worth of global demand available as inventory buffer.
All these factors combined have driven spot prices upward by over 20% so far this year, reaching levels not seen in two years and approaching $1,100 per ounce. Some analysts even suggest prices could hit $1,200 if these trends continue without new sources of supply emerging.
In short: limited mine output plus rising Chinese investment interest and industrial use are tightening the market significantly. With inventories dwindling fast and no major new mines on the horizon to boost production soon, platinum’s price rally looks set to persist through 2025—and possibly beyond—as buyers compete for a metal growing scarcer by the day.