Platinum has had a wild ride over the years, with some dramatic price swings that have caught investors and industries off guard. If platinum repeats its historic 70% crash after peaking in 2025, the consequences could be significant for markets, mining companies, and industries relying on this precious metal.
Back in the 1980s, platinum prices soared but then crashed by about 70% over roughly two and a half years. A similar sharp drop happened again during the financial crisis of 2008, where prices plunged even faster—in just ten months. These crashes were driven by shifts in demand, economic downturns, and supply changes.
Fast forward to today: Platinum is currently experiencing a strong rally. In mid-2025 alone, it surged more than 30%, reaching levels not seen since September of previous years. This rally is fueled by tight supply conditions—especially from South Africa which produces about 70% of global platinum—and growing demand linked to clean energy technologies like fuel cells and catalytic converters.
However, beneath this rally lies vulnerability. Mining costs are high; nearly 40% of global platinum mines operate at or below cash cost thresholds due to low prices earlier in the decade. This has already led to production cuts—South African output dropped from around 4.5 million ounces to about 4 million ounces recently—and geopolitical risks add further strain with labor strikes and energy shortages disrupting operations.
If after peaking in 2025 platinum were to crash again by roughly 70%, several things could happen:
– **Mining Industry Impact:** Many mines would become unprofitable quickly as prices fall below operating costs even more severely than now. This could force additional mine closures or slowdowns beyond current levels already squeezing supply.
– **Supply Chain Disruptions:** With fewer active mines producing less metal amid ongoing geopolitical challenges (like sanctions on Russian producers or export levies in Zimbabwe), supply shortages might deepen despite lower prices.
– **Market Volatility:** Investors who have jumped into platinum as a “cheaper gold” alternative might face heavy losses if confidence evaporates suddenly after such a steep decline.
– **Industrial Effects:** Platinum’s role in catalytic converters for vehicles (especially diesel) and emerging green technologies means price crashes can affect manufacturing costs but also potentially reduce incentives for recycling or investment into new mining projects.
– **Long-Term Price Recovery Potential:** Historically when such deep crashes occur alongside mine closures due to unprofitability, markets eventually find support because reduced supply meets steady demand—though it may take years before recovery happens.
In essence, another massive drop like those seen before would shake up both producers and consumers of platinum deeply while creating uncertainty across financial markets tied to precious metals investments. The balance between shrinking supplies caused by costly production versus falling demand triggered by economic slowdowns will determine how far prices fall—and how long it takes for them to bounce back again after hitting bottom once more.