By Linh Tran, Market Analyst at XS.com
Platinum has surged impressively by nearly 90% from the 885 USD/oz low of early Q2 this year, following almost three years (2022-2024) of relatively muted sideways price movement. This subdued phase stemmed from several factors, including large inventories accumulated by automakers after COVID, persistently high interest rates, concerns over a global economic slowdown, a lackluster Chinese market, continuous ETF outflows, and capital flows shifting in favor of gold.
Unlike gold and silver, platinum is not only a precious metal but also carries the characteristics of an industrial metal, making it sensitive to economic growth and technological trends. Platinum is an essential component in the production of exhaust catalysts, the petrochemical industry, fuel-cell technology, and hydrogen electrolysis. Meanwhile, its supply is extremely concentrated, with approximately 74% coming from South Africa, and the rest mainly from Russia, Zimbabwe, Canada, and the United States. This concentration makes the platinum market more vulnerable to mining disruptions or geopolitical risks in these countries.
Throughout most of 2025, the supply & demand landscape for platinum has shifted significantly. Years of low prices placed considerable pressure on the mining sector, forcing companies to cut output, delay investments, or shut down operations with low profit margins. This led to a tightening of supply just as inventories declined after nearly three consecutive years of being drawn down by automakers to cover shortages.
In South Africa (the country responsible for the majority of global output) electricity shortages, rising mining costs, and aging ore bodies continue to weigh on production. Meanwhile, industrial demand has recovered across multiple segments, from automotive and jewelry to hydrogen fuel cells. Additionally, as other precious metals like gold have entered high valuation territory, investors have tended to diversify into undervalued precious-metal assets, making platinum one of the beneficiaries of this capital rotation.
The future outlook for platinum depends on several factors, including:
Structural supply conditions. South Africa faces multiple challenges such as electricity shortages, rising operating costs, aging ore bodies, and reduced investment. According to GlobalData, production in 2025 is expected to decline by 6.4% compared with 2024, and while it may recover in 2026, the pace will be very slow, with an average growth rate of around 1.4% per year during 2026-2030. Russia and Zimbabwe also encounter geopolitical and logistical constraints. This makes platinum a metal with a highly vulnerable supply structure.
Platinum demand in the automotive sector has recovered after the pandemic, rising from 2.77 million oz in 2022 to 3.21 million oz in 2023 (WPIC), supported by the diesel and heavy-duty vehicle segment. The tightening of emission standards in Europe, China, and India also contributes to stronger demand for this metal, although WPIC forecasts a slight decline from 2025 onward as electrification accelerates. Hybrid vehicles and hydrogen-powered vehicles still require platinum for exhaust treatment systems or fuel cells. WPIC forecasts that by 2029, FCEVs will account for only about 3% of automotive platinum demand; however, this is still considered a positive contribution.
Platinum is the primary catalyst material used in PEM fuel cells and PEM electrolysers, both of which are key technologies in the clean-energy strategies of the United States, Europe, and China. According to estimates from WPIC and the IEA, if hydrogen projects progress on schedule, global electrolyser capacity could expand significantly in the second half of this decade, driving platinum demand related to hydrogen higher than current levels. Although still a small component of total demand, the hydrogen segment is viewed as one of the long-term growth drivers for platinum.
Although platinum does not benefit from central-bank demand the way gold does, it still stands to gain as the Fed shifts toward a rate-cutting cycle. Lower real yields and expectations of looser monetary conditions typically create a supportive environment for precious metals in general. And with gold valuations remaining high, diversification needs may lead investment flows to partially rotate toward other metals, including platinum.
However, alongside these supportive factors, platinum also faces several notable risks: A slower economic outlook could weigh on automotive demand, thereby reducing platinum consumption in the short term; the Hydrogen Economy remains a long-term story and is not yet fully reflected in current prices; in addition, supply-side risks may cause platinum prices to become more volatile and less predictable compared with gold.
Furthermore, platinum also faces substitution risk from palladium. In the 1990s, palladium once overtook platinum in gasoline-engine catalysts due to its lower price, leading to a sharp decline in platinum demand. However, when palladium surged to extremely high levels during 2019-2022, automakers began shifting back toward using more platinum. Based on that historical precedent, it is not impossible that if platinum continues to establish new highs, the market may again reallocate part of its demand toward alternative materials.
Based on the positively shifting supply–demand dynamics and the gradual rotation of capital toward metals other than gold, platinum is likely to have an opportunity to extend its current upward momentum.
In the short term, if the current momentum is maintained and the supply & demand backdrop remains stable, platinum may move toward the 1,800 USD/oz region.
In the medium term, the scenario of extending the rally toward around 2,000 USD/oz remains feasible, especially if the Fed maintains a dovish trajectory, capital flows continue rotating into metals beyond gold, and supply from South Africa does not recover more strongly than expected. However, this would still place platinum near multi-year highs, meaning that correction risks and macro-driven volatility must be monitored closely.
It should be noted that caution remains necessary as platinum is trading near its highest levels in many years. Technical pullbacks are inevitable, particularly given the market’s sensitivity to global economic fluctuations.