Platinum is facing a significant supply deficit that is shaping its future in profound ways. For the past few years, demand has consistently outstripped supply, creating what experts call a “structural deficit.” This means that more platinum is being used than mined and recycled, causing above-ground stockpiles to shrink rapidly. These inventories are expected to fall to critically low levels within the next two to three years if current trends continue.
One of the main reasons for this shortage is a decline in primary supply, especially from South Africa, which produces about 80% of the world’s platinum. The country’s mining sector has been hit by several challenges including energy shortages caused by rolling blackouts since 2020. These power disruptions have slowed mining operations and increased costs, further tightening global supply.
This persistent undersupply has not yet triggered an immediate price surge because investors and industries have been drawing down existing stockpiles. However, as these reserves dwindle toward exhaustion—projected around 2027 or shortly thereafter—the market will likely face much stronger upward pressure on prices.
The consequences of this deficit extend beyond just pricing. Platinum’s role in various industries such as automotive catalytic converters (which reduce vehicle emissions), jewelry, and emerging technologies like hydrogen fuel cells means that shortages could influence innovation paths and material substitutions. For example, some jewelers are shifting preferences from gold to platinum due to cost dynamics influenced by these market changes.
In essence, the ongoing deficits signal a turning point for platinum: unless new sources come online or demand shifts dramatically downward—which currently seems unlikely—the metal’s scarcity will become more pronounced. This scarcity could elevate platinum’s status among precious metals both as an investment asset and industrial commodity while encouraging efforts toward more efficient use and recycling strategies within affected sectors.