Economic slowdowns hit platinum demand hard because this metal is mostly used in industries that slow down when money gets tight. Factories make fewer cars, chemicals, and glass products, so they buy less platinum for things like catalytic converters and manufacturing processes.
Platinum goes into car engines to clean exhaust fumes, and that’s its biggest use. When the economy slows, people buy fewer new vehicles, especially cars with gasoline engines that need platinum. During the 2008 financial crisis, for example, car sales dropped sharply, and platinum prices crashed from over $2,100 an ounce to under $800 as industrial demand crumbled.[7] Automakers cut back on production, leading to less need for platinum in catalytic converters.
Industrial uses take another big bite out of demand. Platinum helps make glass for buildings and screens, and it’s key in chemicals. In a slowdown, construction stalls and factories run slower, so orders for platinum fall. One forecast notes industrial demand could drop 22 percent in 2025 from record highs in glass applications, tied to weaker economic activity in places like China.[5]
Investment demand can shift too, but it’s less reliable. Slowdowns make investors nervous, and some turn to platinum as a safe haven like gold. But higher prices from earlier shortages often lead to selling, cutting net investment. The World Platinum Investment Council expects outflows from exchange-traded funds and warehouses in 2026 as people take profits amid economic uncertainty.[4][5]
Supply issues in South Africa, which provides 70 to 80 percent of the world’s platinum, add pressure but don’t fully offset weak demand. Mining disruptions from floods, power problems, and low investment keep output low, yet demand drops faster in tough times.[1][2][5]
Jewelry demand offers some buffer, especially in China, where platinum is popular and cheaper than gold right now. But even that can weaken if consumers cut spending during slowdowns.[6]
Overall, economic slowdowns mean less car production, fewer factories humming, and cautious investors, all slashing platinum needs. For more details, see analyses from https://www.fxstreet.com/analysis/what-drove-the-strong-performance-of-platinum-group-metals-in-2025-202512151929 on market tightness and supply woes.[1]
Sources
https://www.fxstreet.com/analysis/what-drove-the-strong-performance-of-platinum-group-metals-in-2025-202512151929
https://deriv.com/blog/posts/why-metals-are-surging-fed-uncertainty
https://www.kitco.com/opinion/2025-12-16/us-labor-market-shows-resilience-amid-broader-economic-slowdown
https://www.morningstar.com/news/dow-jones/202511196183/platinum-market-forecast-to-recover-with-small-supply-surplus-expected-in-2026-commodities-roundup
https://gerrardsbullion.com/invest/2026-platinum-predictions-will-tight-supply-keep-prices-high/
https://www.heraeus-precious-metals.com/en/company/press-and-news/heraeus-precious-metals-forecast-2026/
https://fortune.com/article/current-price-of-platinum-12-16-2025/