Platinum is facing a serious supply crunch in 2025, and this shortage is pushing prices higher. The root of the problem lies mainly in the limited availability of new platinum coming from mines. South Africa, which produces about three-quarters of the world’s platinum, is struggling with ongoing issues like electricity shortages, labor strikes, and tough regulations that are slowing down mining operations. As a result, global mine production is expected to drop by around 6% this year.
At the same time, demand for platinum keeps growing across several key areas. The automotive industry still relies heavily on platinum for catalytic converters that reduce harmful emissions. Jewelry demand—especially from China—is also rising again after some slowdowns in recent years. Industrial uses and investment interest are adding to the pressure on supply as well.
Because new mines are rare and expensive to develop due to geological challenges, there’s no quick fix on the horizon to increase supply significantly. Recycling efforts aren’t enough either to fill this gap.
This combination of falling production and rising demand has led to a market deficit for three years running now—a shortfall large enough that it could drain existing stockpiles within just a couple more years if trends continue unchanged.
Prices have already responded strongly: platinum has surged roughly 30% so far this year alone, outpacing gold’s gains during the same period. Investors who had long overlooked platinum are starting to see its potential as an undervalued asset amid these tight fundamentals.
In essence, what we’re witnessing is a classic case where scarcity meets strong appetite—driving prices upward until either new sources come online or demand eases significantly (which seems unlikely anytime soon). This makes 2025 a pivotal year for platinum markets as they approach what many experts call a “tipping point,” where price adjustments could become even more dramatic due to persistent supply constraints combined with robust global demand growth.