Platinum has been making headlines in the precious metals market, particularly with its recent price surge. As of late May 2025, platinum prices reached a two-year high of over $1,096 per ounce, marking a significant increase of more than 20% since the start of the year. This upward trend is largely driven by persistent supply deficits and a notable increase in demand from China.
The supply side of platinum is facing challenges, with forecasts indicating a substantial market deficit for 2025. This is the third consecutive year that platinum supply has fallen short of demand, primarily due to reduced mining output in South Africa and lower recycling rates. The total platinum supply is expected to decline, leading to a decrease in above-ground stocks. These stocks are projected to fall by about 25%, which would cover less than four months of global demand.
On the demand side, China has been a key driver of platinum’s recent rally. Chinese investors have been increasingly interested in platinum as an alternative to gold, given gold’s high prices. This has led to a significant increase in platinum imports, with April 2025 seeing the highest monthly import volume in a year.
Looking ahead, while some forecasts suggest that platinum could reach around $1,140 by the end of 2025, others predict more modest gains. However, the question remains whether platinum could eventually target higher prices, such as $1,800. Given the current supply and demand dynamics, it’s possible that platinum could continue to rise, especially if demand from sectors like hybrid vehicle manufacturing and jewelry continues to grow.
The long-term outlook for platinum is promising, with predictions suggesting that its price could rise significantly over the next few years. However, reaching $1,800 would require sustained demand growth and possibly even more severe supply constraints than currently anticipated. For now, platinum’s resurgence is a testament to its enduring value in both industrial and investment markets.