Global Platinum Supply Faces Third Consecutive Year of Shortfall

The World Platinum Investment Council (WPIC) has forecasted a global platinum supply deficit for the third consecutive year in 2025, citing constrained mine output despite improvements in recycling. The deficit is projected to reach 539,000 troy ounces, down from the revised 682,000-ounce shortfall expected in 2024.

The imbalance reflects a combination of increasing demand in key sectors such as automotive and jewellery and declining mined supply, particularly in South Africa, the largest producer of platinum globally.

Automotive Demand Reaches Eight-Year High

The automotive sector is projected to consume 3.2 million ounces of platinum in 2025, marking its highest demand since 2017, according to WPIC data. This reflects a 2% year-on-year increase, attributed to the growing use of hybrid vehicles and stricter emissions regulations.

“The automotive market continues to adjust to regulatory and consumer pressures, prioritising hybrid vehicles and substituting platinum for palladium in catalytic converters,” explained Edward Sterck, WPIC’s head of research.

Jewellery Demand Sustains Growth

Jewellery demand is expected to grow for the second year in a row, increasing by 2% in 2025. This growth is driven by increased fabrication activity in India, a key market for platinum jewellery, following earlier periods of slower demand.

Industrial and Recycling Dynamics

Industrial use of platinum is forecast to decline by 9% in 2025, reflecting the tapering of capacity expansions seen in recent years. However, demand from this sector will remain above the 10-year average, supported by applications in areas such as hydrogen energy and medical technology.

Recycling supply is anticipated to recover by 12% in 2025, with increases driven by autocatalyst and jewellery recycling. Despite this recovery, total recycling output will remain below pre-pandemic levels.

Supply Constraints and Market Implications

Global mine supply is expected to contract by 2% in 2025, primarily due to challenges faced by South African producers. Recycling efforts will offset some of the mined supply decline, but total supply is expected to remain constrained.

Above-ground platinum stocks are forecast to decrease by 15% in 2025, representing just over four months of global demand. This reflects ongoing supply challenges and potential pressures on the industry’s ability to meet sustained demand.

Jewellers may benefit from growing demand for platinum jewellery, particularly in markets like India. However, supply constraints and potential cost increases could create challenges for pricing strategies.