Wars and sanctions can sharply reduce the global supply of platinum by disrupting mining, processing, trade routes, and recycling flows, and by prompting buyers and sellers to reroute trade or hoard inventories, which tightens available supply and raises prices[2][9].
Context and key mechanisms
– Concentration of supply raises vulnerability: A large share of primary platinum group metal production comes from a few countries, so geopolitical shocks concentrated in those jurisdictions have outsized effects[9][5].
– Direct production disruptions: Armed conflict, military operations, or political instability can force mines to halt operations, cut workforce availability, or damage infrastructure, reducing output from affected mines[9][5].
– Sanctions and export controls restrict trade: Sanctions that target producing countries or key firms can prevent metal leaving those countries or block buyers from paying or taking delivery, effectively removing material from the global market even if mines keep producing[2][1].
– Financial and logistical barriers: Sanctions often include banking restrictions, shipping bans, or insurance limitations that make it hard for exporters to get paid or to move metal across borders, causing delays, diversion to alternative buyers, or sales at discounts[2][1].
– Secondary supply and recycling fall: Economic dislocation and logistical challenges reduce recycled platinum from autocatalysts and industrial scrap, tightening supply further when primary flows are constrained[2].
– Inventory shifts and hoarding: Anticipation of sanctions or tariffs can trigger shifts of metal into safe storage locations or exchange vaults (or out of them), creating temporary mismatches between physical availability and reported inventories and increasing price volatility[2].
– Market psychology and investor flows: Wars and sanctions increase safe-haven or speculative demand for precious metals, and monetary responses (for example looser policy or currency moves) can amplify price reactions to supply squeezes[8][2].
Recent examples and evidence
– Russia and the Ukraine war: Russia is a significant PGM supplier; sanctions and trade frictions following the Ukraine war reduced its effective exports and complicated global sourcing, contributing to tighter platinum markets and higher prices[2][5].
– 2024–2025 market tightness: Industry reports and market commentary noted large annual deficits in platinum supply and persistent disruption to secondary supply and recycling, with analysts pointing to sanctions and trade uncertainty as contributing factors to 2025 deficits and price gains[2][9][5].
– Inventory and tariff episodes: Fears of tariffs or restrictions prompted large movements of platinum stocks into and out of exchange warehouses, affecting visible inventories and price behavior as metal was pre-positioned to avoid potential trade barriers[2].
Why the effects persist beyond the immediate shock
– Long lead times: Building new mining capacity or restarting idled shafts takes years, so supply lost to conflict or sanctions is not easily replaced quickly[9][5].
– Recontracting and trust: Buyers may be reluctant to rely again on suppliers in sanctioned or unstable jurisdictions; long-term contracting and diversification can take time and raise costs[1].
– Market structure: Platinum markets are relatively small and tight compared with some other commodities, so even modest disruptions in physical flows can produce large price responses and inventory dynamics[9][5].
Practical implications for stakeholders
– For producers: Sanctions or war near production hubs create operational, legal, and reputational risks that can force shutdowns or require alternative sales channels[2][1].
– For refiners and manufacturers: Supply interruptions increase input costs and may force substitution, stockpiling, or redesign of products that use platinum in catalysts or industrial applications[9][2].
– For investors: Geopolitical shocks create both short term volatility and longer-term re-pricing risks; monitoring concentration of supply, recycling rates, and policy actions helps assess exposure[8][9].
– For policymakers: Trade measures and sanctions can achieve strategic objectives but also distort commodity markets and affect allied supply security, prompting policy responses to secure alternative sources or stockpiles[1][8].
Sources
https://www.fxstreet.com/analysis/what-drove-the-strong-performance-of-platinum-group-metals-in-2025-202512151929
https://www.kitco.com/news/article/2025-11-19/balanced-platinum-market-2026-wont-fix-fundamental-long-term-issues-wpic
https://www.aberdeeninvestments.com/en-us/investor/insights-and-research/commodities-the-year-that-was-the-year-that-could-be-2026
https://sprott.com/insights/uranium-s-tale-of-two-markets/
https://www.theassay.com/articles/in-discussion/gold-at-4000-edward-meir-on-whats-driving-the-bull-run/