Platinum prices are surging now because global supply is unusually tight at the same time demand is rising—from industrial uses, investment flows, and new Chinese futures—creating a structural deficit that has driven prices to multi‑year highs.[1][2]
Essential context and key drivers
– Supply constraints: South Africa, the largest producer, faces production bottlenecks such as power shortages, aging mine bodies, higher operating costs and weak capex for new projects, while geopolitical risks and constrained output from Russia reduce alternative supply sources; these factors have left markets short of metal.[3][4][2]
– Rising borrowing and lease costs: The cost to borrow or lease physical platinum in London has climbed to historically high levels, which signals that holders are reluctant to lend metal and points to low available inventories in trading hubs.[1]
– Strong investor demand: Precious‑metals investors poured capital into platinum in 2025 as part of a broader metals rally, restoring its historic correlation with gold and magnifying upside pressure on price.[2][1]
– Chinese market developments: New platinum futures trading in China and robust Chinese imports have boosted demand and created a separate, active source of buying that bid prices higher relative to other benchmarks.[1][3]
– Energy transition and hydrogen: Platinum is a critical catalyst in proton exchange membrane fuel cells and in electrolysers used for green hydrogen production; rising policy and industrial interest in hydrogen adds durable industrial demand over coming years.[2][3][4]
– Recycling and supply response are limited: Although recycling is increasing, it has not yet offset mine shortfalls quickly enough to prevent the current deficit, and the long lead times for new mining projects mean supply cannot be ramped up rapidly.[2]
How these factors interact
– Tight physical supply plus new concentrated sources of demand (investment flows and Chinese futures) creates feedback: low visible inventories push lease rates up, which makes physical metal scarcer for traders, which in turn supports higher spot prices.[1]
– Macroeconomic context matters: A resilient global economy and rising gold prices have supported precious‑metal appetite generally, helping lift platinum alongside other metals even when some industrial demand risks remain.[2][5]
What analysts and market measures are saying
– Prices and gains: Analysts reported platinum more than doubling in 2025 and reaching a 17‑year high as markets tightened and trading activity in China surged.[1][3]
– Forecasts: Many price models and analysts expect elevated prices to persist into 2026 because the structural deficit is likely to last several years absent large new mine investment or a sudden demand shock.[3][2]
Risks that could change the trend
– Slower industrial growth or a drop in investor demand could reduce price pressure; a stronger US dollar or aggressive interest‑rate moves could also damp precious‑metals flows.[2][5]
– Policy or trade actions that alter flows (for example tariffs or export changes) could shift where metal is held and traded, temporarily affecting local prices and inventories.[1]
Sources
https://us.fashionnetwork.com/news/Platinum-hits-17-year-high-as-tight-supply-doubles-price-in-2025,1792944.html
https://www.interactivebrokers.com/campus/traders-insight/securities/commodities/why-a-structural-deficit-and-hydrogen-economy-could-boost-platinum/
https://www.streetwisereports.com/article/2025/12/15/platinums-impressive-ascent-could-continue-through-2026.html
https://www.sunsirs.com/uk/detail_news-28910.html
https://www.litefinance.org/blog/analysts-opinions/platinum-price-prediction-and-forecast/