Platinum is in short supply primarily because global production is concentrated and disrupted, aboveground inventories have fallen, and demand—especially from investors, automakers, and China—has surged, creating a tight three-way competition for the metal that pushed lease rates and prices sharply higher[1][2].
Essential context and supporting details
– Production concentration and supply interruptions: Most primary platinum comes from a small number of suppliers, with South Africa supplying the bulk of mined platinum; disruptions there (power outages, strikes, operational problems) strongly affect global output and have contributed to 2025 supply deficits[2][5].[2][5]
– Aboveground stock depletion: Inventories held in exchange warehouses and other aboveground stocks historically cushion deficits, but those buffers have been drawn down over recent years, turning recurring annual deficits into an acute shortage of immediately available metal[2][4].[2][4]
– Rising investment demand and market positioning: A sharp wave of investment flows into platinum in 2025, including holdings in exchange warehouses and physical buying, removed metal from circulation and amplified the shortage; high borrowing and lease rates in London show market participants are reluctant to part with physical metal[1][2].[1][2]
– Geographic competition and new trading infrastructure: China’s launch of physically settled platinum futures on domestic exchanges increased Chinese appetite for physical metal, creating a three-way geographic contest (US, Europe, China) that strained supplies and pushed some metal into specific warehouses, reducing global fungibility[1][2].[1][2]
– Automotive and industrial demand: Platinum is used in catalytic converters, chemical processes, glass and laboratory equipment; any growth or substitution dynamics in the auto sector (switching between platinum and palladium depending on price and emissions needs) alters demand and can tighten the platinum market further[2][5].[2][5]
– Market mechanics that amplify shortfalls: When inventories are low and lease rates are high, manufacturers prefer leasing or delay buying, while investors and speculators may hoard metal, both of which reduce available supply and can cause sharp price moves—examples in 2025 include historically high one-month borrowing costs and large volumes parked in US warehouses amid tariff worries[1][4].[1][4]
– Near-term outlook and possible easing: Some analysts and institutions expect investment flows to moderate and for the market to rebalance modestly in 2026 if some of the temporary investment-driven demand reverses, though fundamental issues like supply concentration and long-term industrial demand remain unresolved[3][7][8].[3][7][8]
Sources
https://ww.fashionnetwork.com/news/Platinum-hits-17-year-high-as-tight-supply-doubles-price-in-2025,1792918.html
https://www.ipmi.org/news/platinums-80-surge-3-hidden-forces-driving-it
https://www.morningstar.com/news/dow-jones/202511196183/platinum-market-forecast-to-recover-with-small-supply-surplus-expected-in-2026-commodities-roundup
https://www.prnewswire.com/news-releases/platinum-market-to-end-2025-with-692-koz-deficit-potential-easing-of-tariff-fears-leads-to-a-more-balanced-platinum-market-in-2026-302619223.html
https://fortune.com/article/current-price-of-platinum-12-16-2025/
https://nai500.com/blog/2025/11/platinum-prices-hit-15-year-high-what-are-the-driving-forces/
https://www.miningweekly.com/article/balanced-2026-platinum-market-forecast-dependent-on-global-trade-tension-let-up-2025-11-18
https://www.kitco.com/news/article/2025-11-19/balanced-platinum-market-2026-wont-fix-fundamental-long-term-issues-wpic