Platinum prices surged last week to their highest levels in two years, posting the strongest five-day gain in over a year as investors responded to new research forecasting a deeper-than-expected global supply deficit. The World Platinum Investment Council (WPIC) now projects that platinum supply in 2025 will fall to a five-year low of just 7 million ounces, down 4% from last year, with above-ground stocks covering only three months of demand. This tightening supply picture drove platinum up 10.78% last week, sparking a rally in shares of major South African platinum group metal (PGM) miners.
The WPIC’s revised outlook points to a market deficit nearing one million ounces for 2025, the third consecutive year of undersupply. The shortfall follows a sharp 13% year-on-year drop in global mined supply in the first quarter, the lowest quarterly output in nearly five years. South Africa, the world’s largest platinum producer, accounted for the bulk of the decline, with production down 10% as local miners adjusted to lower prices and contended with operational disruptions from unusually heavy rainfall.
Major South African producers, including Anglo American Platinum, Impala Platinum, Northam, and Sibanye Stillwater, all reported lower output in the first quarter. Some, such as Sibanye-Stillwater, have warned that unprofitable shafts may close if prices do not recover, while Implats has called for further supply cuts across the sector. Research group Metals Focus estimates that nearly one-sixth of global PGM production was unprofitable last year, reinforcing the likelihood of further reductions in output.
Despite these supply constraints, the tightness in the platinum market has not yet been fully reflected in prices, but has led to elevated platinum lease rates as end users seek to secure supply. Investor interest is growing, with platinum exchange-traded funds hitting new highs in 2025 and jewelry demand rebounding, particularly in China. Chinese platinum imports reached 10 metric tons in April, a 47% increase from March and the highest monthly figure in a year. The surge in demand is attributed to both industrial and investment uses, as well as the metal’s relative affordability compared to gold, which recently hit record highs.
The WPIC notes that platinum’s strategic importance to the US automotive industry may have shielded it from recent US tariffs on other metals, though ongoing trade tensions and the shift toward electric vehicles—which use fewer PGMs—continue to create uncertainty for long-term demand. Nonetheless, the council expects the current deficit to persist, with the 966,000-ounce shortfall forecast for 2025 unlikely to be materially reduced by trade restrictions or softer global economic activity.
