Platinum is rapidly gaining attention as a promising asset class, driven by a combination of supply deficits, rising demand, and its critical role in emerging technologies. This precious metal, known for its rarity and versatility, is primarily used in automotive catalytic converters, chemical processing, electrical components, and petroleum refining. About 80% of global platinum production comes from South Africa, followed by Russia and North America. However, South Africa’s aging infrastructure and operational disruptions have led to reduced output, contributing to a pronounced supply deficit.
The platinum market is experiencing its third consecutive year of supply deficits, with forecasts indicating a shortfall of nearly a million ounces in 2025. Total supply is expected to decline by about 4%, reaching its lowest level in five years. This tightening supply situation is exacerbated by lower recycling rates and declining above-ground stocks, which are projected to fall significantly. As a result, platinum prices have surged over 20% year-to-date, reaching a two-year high.
Demand for platinum remains robust, particularly in the automotive sector. Despite a modest decline in automotive demand due to market uncertainty, the slowdown in electric vehicle (EV) adoption has sustained demand for internal combustion engine and hybrid vehicles, both of which use platinum in catalytic converters. Stricter emissions regulations, such as Europe’s upcoming Euro 7 standards, are expected to increase platinum loadings in vehicles further.
Platinum also plays a pivotal role in the burgeoning hydrogen economy. It is used in fuel cells and hydrogen electrolyzers—core technologies in the clean energy transition. As governments and corporations invest heavily in hydrogen infrastructure, demand for platinum in non-automotive industrial applications is soaring.
In addition to its industrial uses, platinum is gaining traction as a cost-effective alternative to gold in jewelry, particularly in China. High gold prices have prompted consumers and jewelers to turn to platinum, leading to a significant increase in platinum jewelry demand. Investment demand remains strong, supported by robust bar and coin purchases in China.
Overall, platinum’s unique combination of supply constraints, rising demand, and its role in emerging technologies positions it as a compelling asset class to watch in the current market landscape. Its potential for further price appreciation, driven by fundamental market forces, makes it an attractive option for investors seeking diversification and growth opportunities.