In 2025, platinum has been riding a potent wave of renewed investor interest and industrial demand, and a central factor behind its resurgence is the increasing fragility of supply. As global refined output declines, mining constraints tighten, and inventories shrink, the market is finding stronger support beneath prices that many had long regarded as vulnerable.

• Supply is increasingly constrained: South African mining challenges, shaft closures, flooding, and processing bottlenecks are driving a drop in output
• Structural deficits extend into 2025: With global refined production falling and recycling unable to keep pace, analysts expect a third year of platinum deficits
• Demand and sentiment underpin the rally: Strong industrial, jewelry, and investment demand are keeping upward pressure even as inventories shrink

At the heart of the story is South Africa, the engine of the platinum world. Its mines continue to face structural challenges. Older shafts are becoming less economical, flooding, and processing bottlenecks are weighing on throughput, and the number of operating shafts is shrinking. The global supply picture looks no less precarious.

In the first half of 2025, refined production of PGM metals slipped 8% year on year, largely on account of South African disruptions. Platinum in particular is expected to suffer a full-year supply drop, with estimates forecasting supply at roughly 5.4 Moz, about 6% lower than in 2024. The World Platinum Investment Council projects that 2025 will mark a third straight annual deficit, driven by demand outpacing constrained output.

Compounding the mining headwinds, secondary supply is offering little relief. The economics of recovering platinum from spent catalytic converters and other sources are challenged when prices and processing costs are volatile. At the same time, above-ground stocks, once cushions against tightness, are being drawn down.

On the demand side, platinum is pulling strength from multiple fronts. Industrial usage, jewelry demand and investment flows are all contributing to a more supportive backdrop. The phenomenon of “gold fatigue”, where some investors and jewelers shift from gold into platinum as gold becomes more expensive, is also being cited as a contributing factor.

That said, the rally is not without risks. High prices, in theory, should entice new production, but many prospective projects face long lead times, large capital requirements, regulatory or environmental barriers, and uncertain returns. Moreover, price elasticity in demand, substitution, or global economic weakness could all temper future upside.

In essence, platinum is benefiting from a confluence of tightening supply and resilient demand, a rare alignment that has restored momentum to a market long in the shadow of gold and palladium. Whether it can maintain this revived trajectory will depend on how well constraints are managed and whether new supply can emerge in time.

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