Supply chain issues are having a significant impact on the platinum market, creating a situation where demand is outstripping supply and causing prices to rise sharply. Several key factors contribute to this dynamic.
First, mine production of platinum has been declining, especially in South Africa, which produces about 80% of the world’s platinum. Aging mining infrastructure and operational challenges have led to reduced output. Some mines have cut back production because low prices in recent years made it uneconomical to operate deep underground shafts that are costly to maintain. This has resulted in a drop in global mine supply by around 6% for 2025 and even sharper declines earlier in the year, reaching the lowest levels since 2020.
Second, recycled platinum supply is also shrinking. Much of recycled platinum comes from old car catalytic converters. However, used cars are being kept longer than before—especially in places like the United States where the average vehicle age hit a record high of over 12 years recently—meaning fewer vehicles are scrapped and recycled each year. Additionally, higher used car prices discourage owners from selling their vehicles for recycling purposes.
These two factors combined mean that total available platinum supply is falling short by hundreds of thousands of ounces annually for several years running—a deficit estimated at nearly one million ounces or about 12% below global demand this year alone.
On the demand side, several trends push consumption higher despite these shortages:
– Automotive use remains strong because many internal combustion engine (ICE) and hybrid vehicles still require platinum for catalytic converters that reduce emissions. In fact, upcoming stricter emissions regulations like Europe’s Euro 7 standards will likely increase how much platinum automakers need per vehicle.
– Jewelry demand is rising again globally but especially across Asia and China where consumers see platinum as an attractive alternative to gold due to gold’s high price.
– Investment interest has surged with more buyers purchasing physical bars and coins amid concerns about tightening supplies.
– Industrial uses related to clean energy technologies such as hydrogen fuel cells and electrolyzers are growing rapidly as governments invest heavily into hydrogen infrastructure worldwide.
All these forces together create a market environment where above-ground inventories—the stockpiles held outside mines—are shrinking fast; estimates suggest they could be depleted within three years if current trends continue.
In essence, supply chain disruptions rooted mainly in mining constraints and reduced recycling availability have tightened access to new or recycled platinum significantly just when multiple sectors want more metal than ever before. This imbalance between constrained supply growth versus rising multi-sector demand sets up conditions for continued price increases going forward until either new sources come online or some other change eases pressure on availability.