Platinum is experiencing a notable price surge in 2025, and the main reason behind this rise is its growing scarcity. The platinum market has been facing supply deficits for several years now, with 2023 and 2024 showing shortfalls of around 750,000 and 680,000 ounces respectively. For 2025, the deficit is expected to be close to half a million ounces or even higher—some estimates suggest nearly a million-ounce shortfall. This persistent undersupply is pushing prices upward.
One key factor causing this scarcity is reduced mine output from South Africa, which produces about 80% of the world’s platinum. Many mining operations there are deep underground and costly to run. When prices were weaker in previous years, producers cut back on extracting from these expensive shafts because it was not economically viable. Even as prices rise now, ramping up production takes time due to the complexity of mining operations.
Another important element contributing to lower supply comes from recycling sources—particularly recycled platinum from used car catalytic converters—which has declined by roughly 300,000 ounces recently. This drop happens partly because people are holding onto their cars longer than before; for example, in the U.S., the average vehicle age reached over twelve years by 2024. Older cars mean fewer catalytic converters being recycled annually.
On the demand side, platinum’s role in clean energy technologies like hydrogen fuel cells is expanding rapidly. These fuel cells use platinum as a catalyst for zero-emission vehicles and industrial applications—a sector expected to consume up to one million ounces per year by around 2030 compared with negligible amounts today.
Additionally, stricter environmental regulations worldwide require more platinum in automotive catalytic converters to reduce harmful emissions such as nitrogen oxides (NOx). For instance, new European standards aim for significant NOx reductions by mid-2026 while China’s luxury car market has seen a sharp increase in platinum imports recently.
Investment interest also plays into rising prices: institutional investors are increasingly turning toward platinum ETFs as an alternative or complement to gold amid economic uncertainties like slower global growth or stagflation fears.
Despite trading at only about sixty percent of gold’s price level currently—even though its supply constraints are tighter—platinum’s physical availability remains tight enough that borrowing costs (lease rates) have spiked dramatically compared with gold’s flat rates over recent months; this signals real scarcity on hand rather than just speculative demand.
In short: limited mine production due mainly to cost pressures; declining recycled supplies caused by aging vehicle fleets; growing industrial demand driven by clean energy transitions and tougher emission rules; plus rising investor appetite—all combine into sustained shortages that push up platinum’s price through much of 2025 and likely beyond.