Platinum stockpiles are running out fast, leaving just four months of demand covered, the lowest in modern history. This shortage is pushing prices up sharply and shaking industries that rely on the metal.
Platinum comes mostly from mines in South Africa, which supplies over 70 percent of the world’s total. In 2025, production there dropped 6.4 percent to about 3.87 million ounces, the lowest in 25 years outside of big disruptions like strikes or the pandemic. Reasons include old mines running dry, broken infrastructure, power cuts, and years without new investments. For example, Anglo American Platinum lost 105,000 ounces in 2022 from blackouts, and Impala Platinum sat on 200,000 ounces unsold due to processing problems. Check out more details in this analysis from https://shanakaanslemperera.substack.com/p/the-platinum-singularity-how-the.
Demand keeps growing while supply shrinks. The market has faced deficits for three years straight, totaling over 2.7 million ounces since 2023. Cars use platinum in catalytic converters to cut pollution, and slower shifts to electric vehicles mean more need for it. Factories, jewelry, and investors are buying more too. Sprott reports no big new mines coming soon, so tight supply and falling stocks are boosting the investment case. See their insights at https://sprott.com/insights/.
Above-ground stocks, the extra metal held in vaults and warehouses, are nearly gone. This thin buffer means any hiccup in mining or shipping could halt deliveries. In mid-2025, lease rates for physical platinum jumped above 25 percent a year, a red flag for big price swings. The London market went into backwardation, where future prices drop below spot prices, and raw sponge platinum matched prices of polished bars, something traders called rare. Even recycling isn’t helping much. People keep cars longer, scrap collection networks broke down during low-price years, and rules against theft hurt small recyclers.
When stockpiles vanish, prices spike hard. Platinum and palladium have already rallied in 2025 from these shortages, as noted by Sprott. Higher costs hit car makers and jewelers first, raising prices for everyone. Mining costs climb as easy ores disappear, forcing work on tougher, deeper deposits. This mirrors other metals like silver, where low stocks led to squeezes and prices over $66 an ounce. Broader effects include inflation in goods using platinum and delays in green tech like hydrogen fuel cells that need it.
Supply can’t ramp up quickly. New mines take 10 years or more to build, and South Africa’s issues are long-term. Demand from autos and industry outpaces fixes, keeping pressure on.
Sources
https://shanakaanslemperera.substack.com/p/the-platinum-singularity-how-the
https://sprott.com/insights/
https://www.moneymetals.com/podcasts/2025/12/12/supposedly-hawkish-fed-opens-qe-spigot-slashes-rates-004546
https://pollution.sustainability-directory.com/term/mineral-depletion/
https://www.ipmi.org/news/silver-soars-past-66-critical-hedge-inflationary-era-fueled-green-tech-demand
https://www.kitco.com/news/article/2025-11-28/precious-metals-power-surge-silvers-record-run-reawakens-gold-bulls