Introduction: Where Platinum Gets a Turn
Investors are focusing more attention on platinum, the multi-use precious metal with essential business uses. The market which previously experienced supply deficits in 2023 and 2024 is expected to experience its third consecutive annual deficit in 2025, WPIC.
This is mainly triggered by growing demand from automotive catalysts, green hydrogen projects, jewelry, and limited mined supply platinum is set to tighten up in the longer term. The following is closer examination of what has been driving this trend, as well as the major opportunities that are available to the investors.
The Supply Crunch: A Deficit Looms
The platinum market has been in deficit for the past two years, and 2025 is unlikely to break the cycle. According to WPIC, the forecasted shortfall stems from declining production levels in South Africa, the world’s largest platinum producer. Power shortages and operational challenges have disrupted mining operations, reducing output significantly.
At the same time, recycling, which accounts for a considerable share of platinum supply, is struggling to keep pace with growing demand. Despite advancements in recovery technologies, recycled platinum volumes have not been sufficient to offset primary production declines .
Demand Drivers: Automotive and Green Energy
The demand for platinum continues to rise, underpinned by its critical role in several high-growth sectors:
Automotive Catalysts:
Platinum is used in automobile emission control systems known as catalytic converters to minimize dangerous emissions from diesel and hybrid automobiles. This is due to the increasing need for catalytic converters, as auto makers attempt to conform to new enviromental standards. That said, while battery electric vehicles (BEVs) are considered to be competition, an important market for platinum remains the hybrid vehicles.
Hydrogen Economy:
Among all the potential development fields for platinum, green hydrogen production may be one of the most promising. As transition to cleaner energy sources continues, the metal’s use in the electrolyzers and fuel cells cannot be done without. There is more than that to the trend in Europe and Asia because governments in those areas offer incentives to investors in hydrogen projects.
Jewelry and Investment Demand:
There is favorable consumer base attraction to platinum in jewelry particularly within the Asian region. Moreover, owing to high demand from the auto industry and the extension of using platinum as inflation and currency hedge by the institutional investors, is likely to strengthen the demand trend .
Price Dynamics: Challenges and Opportunities
For platinum, on the supply side, the optimism is indexation to consumption to optimism while on the demand side, there has been a volatility which is in tandem with fluctuations in macro economic factors and investors sentiments. Previously platinum has faced the level of $930 for the ounce of metal and in this week’s trading sessions there are mixed views towards platinum on the short side.
From a technical point of view, it is noted that further bearish trend might challenge $900 as support level although, outlook for the pair remains bullish on the longer time horizon. The deficiency that is expected to be provided for the supply side, together with the escalating industrial demand, is expected to offer the more pressure in the prices once we are in 2025.