Platinum’s supply is currently at a five-year low due to a combination of structural and market factors that limit how quickly new production can come online, alongside falling recycling rates and ongoing production challenges. Despite platinum prices soaring to their highest levels in over a decade, these price signals have not translated into increased supply in the short term.
One key reason for this tight supply is the nature of platinum mining itself. About 85% of platinum comes as a by-product from mining other metals in what are called PGM (platinum group metals) operations. Decisions to expand or open new mines depend not just on platinum prices but on the overall value of all metals extracted together. Even when basket prices surged dramatically between 2017 and 2023, total platinum supply actually declined during that period because it takes many years—often eight or nine—for new mines to reach full production capacity. This means any response to higher prices is slow and delayed.
Recycling used to help buffer supply shortages but has recently fallen sharply, hitting its lowest level in over a decade last year with only slight improvement expected this year. Automotive recycling, which once grew significantly, has also slowed down as fluctuating prices affected incentives for reclaiming platinum from catalytic converters.
Production problems have been particularly acute in South Africa—the world’s largest producer—where operational difficulties have constrained output further. These issues combined with no major new mines coming online mean that global mine production fell about 6% last year and remains near its lowest point since 2020.
Meanwhile, demand continues growing steadily across several sectors including automotive catalytic converters (which consume about half of all platinum), jewelry markets especially in China, industrial uses, and investment interest amid shifting trends like slower electric vehicle adoption than initially expected.
All these factors contribute to an ongoing market deficit projected at nearly one million ounces this year—a significant shortfall representing around 12% of global demand—and shrinking above-ground inventories worldwide. The result is sustained upward pressure on prices without an immediate increase in available supply.
In essence, **platinum’s five-year low supply reflects deep-rooted structural constraints**: long lead times for mine development; dependence on complex multi-metal operations; declining recycling contributions; persistent operational challenges; and robust demand growth—all combining to keep the metal scarce despite rising market values.