Platinum’s above-ground stock is falling mainly because the supply of platinum is not keeping up with demand. This situation, known as a structural deficit, means that more platinum is being used or held than is being produced and added back to inventories. As a result, the amount of platinum available above ground—meaning all the metal stored in vaults, banks, and other reserves—is shrinking steadily.
One key reason for this deficit is that demand for platinum remains strong across many industries. Platinum has unique properties that make it essential in areas like automotive catalytic converters (which reduce harmful emissions), jewelry, and increasingly in clean energy technologies such as fuel cells. Even though there are some economic risks like tariffs or slower global growth that could reduce demand slightly, these factors have not been enough to close the gap between supply and demand.
Because supplies are tight, lease rates for borrowing platinum have risen sharply. High lease rates discourage refiners from manufacturing new products since borrowing metal becomes expensive. Instead of producing more physical platinum goods, users often borrow existing stocks temporarily to meet their needs. This practice helps keep some supply flowing but also means less new metal enters circulation permanently.
Above-ground stocks have dropped dramatically over recent years—from around 5 million ounces in 2022 down to just over 2 million ounces now—a decline of more than half. With such low inventories left relative to how much platinum people want each month (only about three months’ worth by year-end), the market feels very tight and prices tend to rise sharply when any extra buying occurs.
This falling stock level also makes platinum quite sensitive to investment flows; even small increases in buying can push prices higher because there isn’t much spare metal sitting idle anywhere globally.
In short: Platinum’s above-ground stock falls because ongoing strong demand outpaces limited supply production-wise while high borrowing costs discourage replenishing physical stocks quickly—creating a persistent shortage that eats into reserves year after year.