China is now one of the main drivers of global platinum demand because of rapid growth in industrial use, rising investment and new domestic trading infrastructure that makes buying, hedging and holding platinum easier for Chinese buyers[1][2][5].
Why China matters for platinum
– Largest single-country demand pool: China accounted for roughly 30 percent of global platinum consumption as recent market commentary notes, making its buying patterns central to world prices[1].
– Very high import dependence: China produces almost no primary platinum and imports the vast majority of what it uses, so changes in Chinese buying quickly affect global flows and inventories[3].
– New domestic price discovery and hedging: The launch of platinum futures and options on the Guangzhou Futures Exchange gives Chinese refiners, manufacturers and investors a regulated, local tool to hedge price risk and create onshore price signals that can diverge from London or New York benchmarks[1][2][5][8].
– Strategic policy recognition: Chinese authorities have moved to treat platinum among strategic or critical minerals, which supports state and corporate accumulation and can lift baseline industrial demand expectations[3].
How China consumes platinum
– Automotive catalytic converters: The automotive sector is the single largest industrial source of platinum demand globally and in China, where huge vehicle production volumes create steady fabrications needs for catalyst materials[1][3].
– Jewelry and retail bars/coins: Jewelry demand in China has been strong in recent years because platinum became relatively cheaper than gold at times, and bar and coin investment surged—projected at roughly 418 thousand ounces of bar and coin demand in 2025 in one industry forecast[4][2].
– Industrial and green-energy uses: Beyond autos, platinum is used in glassmaking, chemical catalysts and increasingly in hydrogen and fuel-cell technologies—areas the Chinese state is promoting as part of energy transition plans[3][6].
– Strategic stockpiling and inventories: The availability of futures and clearer price discovery can encourage firms and institutions to hold more physical metal domestically for supply security, tightening visible global supply[1][5][8].
Supply and market balance effects
– Tighter visible supply and higher lease rates: With more metal being moved into Chinese warehouses and exchange-linked vaults, global visible inventories have tightened and borrowing costs for platinum have risen, signaling reluctance to sell physical metal[5][8].
– Deficit dynamics: Multiple market reports for 2025 estimated a material global platinum deficit, amplifying sensitivity to incremental Chinese demand or inventory behaviour[3][4][7].
– Recycling and secondary supply: Higher prices and growing local processing encourage recycling and secondary supply, which can reduce pressure on primary mine output over time but typically lags in response speed[9].
How new Chinese contracts change behavior
– Easier hedging for industrial users reduces price risk for purchasers and may support slightly higher physical consumption because firms can lock input costs[1][2].
– Domestic derivatives attract speculators and institutional investors, boosting onshore trading volumes and sometimes creating domestic price premiums versus international benchmarks[5][8].
– Potential for China-driven market segmentation: As GFEX and other Chinese venues develop vault networks and settlement practices, two-way price discovery between Chinese and international markets can create divergence and arbitrage opportunities[1][5].
Implications for investors, producers and consumers
– Investors: Chinese onshore demand and futures growth can strengthen the case for longer-term platinum exposure, while also increasing short-term volatility as markets rebalance to new price signals[2][3][5].
– Producers: South African and Russian primary suppliers remain dominant, and stronger Chinese demand plus higher prices can improve project economics for new supply from diversified jurisdictions[1][3].
– Industrial users: Manufacturers in China benefit from better hedging tools but may face higher input costs and supply tightness if onshore stockpiling continues[1][8].
Sources
https://discoveryalert.com.au/platinum-futures-market-2025-china-entry/
https://platinuminvestment.com/about/60-seconds-in-platinum/2025/12/18
https://www.streetwisereports.com/article/2025/12/15/platinums-impressive-ascent-could-continue-through-2026.html
https://informistmedia.com/CommodityWire/39461/Platinum-Outlook-World-Platinum-Investment-Council-sees-2025-global-deficit-at-692-000-ounces
https://ww.fashionnetwork.com/news/Platinum-hits-17-year-high-as-tight-supply-doubles-price-in-2025,1792918.html
https://gerrardsbullion.com/invest/2026-platinum-predictions-will-tight-supply-keep-prices-high/
https://www.prnewswire.com/news-releases/platinum-market-to-end-2025-with-692-koz-deficit-potential-easing-of-tariff-fears-leads-to-a-more-balanced-platinum-market-in-2026-302619223.html
https://www.bullionvault.com/gold-news/gold-price-news/platinum-gfex-palladium-121720251