Platinum is facing a serious supply shortage in 2025, and this has big implications for investors thinking long-term. For the third year running, the platinum market is not producing enough metal to meet demand. Experts expect a deficit of around 850,000 to nearly 1 million ounces this year alone, which means demand outstrips supply by roughly 10-12%. This ongoing shortfall is unusual and signals a tightening market that could push prices higher over time.
One main reason for the shortage is that mine production is falling. Platinum mining, especially in South Africa—the world’s largest producer—is declining due to operational challenges and limited new projects coming online. In fact, mined output is expected to drop by about 6% in 2025 compared to last year. Recycling platinum isn’t filling the gap either because recycling rates are low and not growing fast enough.
At the same time, demand for platinum keeps rising across several areas. The automotive industry still needs it for catalytic converters in hybrid vehicles since electric cars don’t use as much platinum but hybrids do. Jewelry demand from China has surged sharply as investors there buy more bars, coins, and jewelry as an alternative investment amid high gold prices. Industrial uses also continue steadily.
Because of these factors—shrinking supply with growing demand—above-ground stocks of platinum are shrinking rapidly too. Inventories could fall by about a quarter this year alone to levels representing less than four months’ worth of global consumption.
For long-term investors, this structural deficit suggests that platinum’s price may be poised for significant gains ahead if these trends persist or worsen. When supplies remain tight while multiple sectors compete for limited metal availability, prices tend to rise until equilibrium returns or new sources come online—which currently looks unlikely anytime soon.
In simple terms: Platinum’s scarcity combined with strong interest from industries and investors means holding onto it now might pay off well down the road as shortages deepen further into this decade.