Platinum is facing a serious supply shortage in 2025, with a projected shortfall of about 9% compared to global demand. This means the amount of platinum available from mines and recycling won’t be enough to meet what industries and investors want. The shortage is largely due to several key factors that are putting upward pressure on prices.
First, mining output is declining, especially in South Africa, which produces around three-quarters of the world’s platinum. Challenges like electricity shortages, labor disputes, and regulatory issues have forced mines to cut back production. Many mines operate deep underground where costs are high; when prices fall or stay low for too long, these operations become uneconomical and get scaled back or paused. This has led to a drop in mine supply by roughly 6% this year.
Second, recycled platinum supply has also decreased significantly. Recycling mainly comes from used automotive catalytic converters that contain platinum. However, people are holding onto their cars longer than before—now averaging over 12 years old—so fewer vehicles reach recycling age each year. Additionally, higher used car prices discourage scrapping older cars for parts.
At the same time as supply tightens, demand for platinum remains strong across multiple sectors: automotive (especially catalytic converters), jewelry (with growing interest in China), industrial uses like electronics and chemicals manufacturing, plus investment demand as some investors shift away from gold toward platinum’s undervalued potential.
Because above-ground inventories—the stockpiles held outside of active use—are shrinking rapidly due to these persistent deficits over consecutive years (2023 through 2025), there’s less buffer left if demand surges or supply dips further. Inventories have fallen by about a quarter since 2022 levels.
All these factors combined create what experts call a “structural deficit,” meaning the market consistently consumes more than it produces without enough new sources coming online soon enough to fill the gap. New mining projects face high costs and geological challenges making them unlikely quick fixes.
The result? Platinum prices have already surged around 30% so far this year alone—a faster rise than gold—and could continue climbing if this imbalance persists or worsens throughout 2025 and beyond.
In essence: A roughly 9% shortfall in global platinum supply signals tightening availability amid steady or rising demand across industries and investment circles alike. Without significant new production increases or changes in consumption patterns soon, price forecasts for platinum point toward continued strength driven by scarcity pressures that may reshape its market dynamics going forward into late 2025 and beyond.