The price of platinum hovering around $900 to $1,000 per ounce for several year soared by over 30% in late May-June, to $1,400, for the first time since August 2014. Before that, the price remained within a narrow range despite such conflicting factors as the risks of a global economic slowdown due to retaliatory tariffs initiated by the USA, as well as import duties on vehicles announced by the USA and the shutdown of the large Tumela mine (Amandelbult complex, Valterra Platinum, former Anglo Platinum) due to flooding in February 2025.
The rise in platinum prices was primarily due to a sharp increase in physical demand in China, Norilsk Nickel explains in its review of the platinum group metals (PGMs) market published in early July. Direct imports into mainland China reached 10 tons per month in April and May, with additional 10 tons per month coming via Hong Kong. Trading activity on the Shanghai Gold Exchange (SGE) also intensified, from an average of 170 kg per day in September-November 2024 up to 380 kg per day in May-June 2025, reflecting a surge in interest from local investors and industry.
Jewelry manufacturers in China used platinum jewelry as an alternative to gold that has reached record price levels, Nornickel explains. Consumer demand for platinum jewelry in China is sluggish, but exceptionally high gold prices motivate retailers to reduce their gold jewelry inventories and increase platinum inventories, Johnson Matthey (JM) says in its report.
The price chart of the three precious metals before May 2025 looked as follows:
Source: Johnson Matthey PGM Market Report May 2025
“Gold is very expensive compared to platinum. The market has basically got used to a different ratio, since platinum has been the most expensive jewelry metal for several decades. Now, the ratio has ‘flipped’, the difference is almost 3-fold. Visually, white gold - especially when coated with rhodium - cannot be distinguished from platinum,” explains Anton Berlin, Vice President and Head of the Sales Division of Norilsk Nickel.
Another factor is the increased purchases by the U.S. investors concerned about the possible duties on platinum group metals as part of the investigation under Section 232. In the first four months of 2025, imports of platinum into the USA increased up to 740 thousand ounces compared to a five-year average of 610 thousand ounces for the same period.
Balance
According to Norilsk Nickel, the platinum market is expected to show a deficit of 200 thousand ounces in 2025, taking into account the investment demand from ETF funds, retail buyers of platinum bars and coins, as well as from government agencies and corporate entities. Demand for platinum will decrease by 1% this year, and supply - by 2%.
In May, the World Platinum Investment Council (WPIC) raised its forecast platinum market deficit for this year to 966 thousand ounces (from 848 thousand ounces in March), which is 12% of the projected global platinum demand. A year earlier, the platinum deficit was 992 thousand ounces. “It is unlikely that deficits would substantially erode … even if a sharp escalation in trade-related economic headwinds arises,” the WPIC believes. Global demand for platinum is expected to decrease by 4% this year, to 7.96 mn ounces. Lower demand from automobile industry and jewelry manufacturing for exporting to the USA will be offset by a stronger demand for jewelry in China and investment demand.
Source: WPIC Platinum Quarterly Q1 2025
Johnson Matthey believes that the platinum market, like the market of other PGMs, will show a shortage of platinum in 2025 estimated at 736 thousand ounces. Platinum supply and demand are expected to decline by about 2.5%.
Is there really a deficit?
However, there is no fundamental deficit in the platinum market, Johnson Matthey states, placing emphasis on the fact that platinum sponge (the form of metal used by most industrial consumers) remained readily available in early 2025. There was a massive supply of platinum bars to NYMEX warehouses in the first quarter amid fears of U.S. imports tariffs on precious metals, which fueled a sharp increase in leasing rates to over 10% and provided some support to prices for platinum. But this is not a liquidity deficit, but primarily a mismatch between the location of the metal and in which form it is available, according to the JM’s review.
While the continued rise in leasing rates that exceeded a near-record 20% in May-June 2025 suggests that short-term demand is outpacing supply and reflects a significant reduction in immediately available physical platinum, the price increase, actually, is still weak, as it has no strong fundamental support, Nornickel agrees.
PGM markets did not show significant backwardation during May and June, which suggests that the recent price increase was not supported by short-term physical supply constraints, Nornickel notes. The increase in imports into China and the USA is not significant enough to be the evidence of a structural shift in demand. “The impact of operational disruptions at Valterra Platinum also appears to be rather limited and insufficient to justify a sustained rally. Recent spot market activities related to industrial users switching from leasing to direct purchases are likely to be temporary rather than long-term growth drivers,” Norilsk Nickel says in its review.
The most important headwinds remain significant above-ground platinum reserves estimated at more than 10 mn ounces (equivalent to more than one year of global consumption) and stored in ETFs, investment bars and coins. “If prices reach attractive levels, these reserves could be released to the market, which would actually limit a further price growth,” Norilsk Nickel believes.
Automotive industry
The main reason for the projected decline in total platinum demand is the weak dynamics in the main consuming sector, the automotive industry, Norilsk Nickel notes. According to WPIC, this sector accounts for 38% of final platinum demand.
Source: WPIC Platinum Quarterly Q1 2025
The automotive industry is gradually recovering to its pre-pandemic levels; in 2025, its production is expected to grow by 1%, to 92 mn passenger cars. In the first five months, despite concerns about the USA’s imposition of a 25% import duty on passenger vehicles and light trucks, global sales rose by 5%, to 32.1 mn units. At the same time, the production of internal combustion engine (ICE) vehicles (including hybrids that also have autocatalysts) is expected to decrease, according to Norilsk Nickel’s estimates, by about 3%, to 76 mn, amid ongoing electrification, albeit at a slower pace.
Although electric vehicles (EVs) remain a growth driver in the global automotive industry, this segment’s gains continued to slow down in 2024, falling short of expectations, according to Johnson Matthey’s review. Globally, their share increased by one percentage point, to 13%, due to China, whose automotive industry continues to grow, in contrast to Europe, North America and Japan.
At the same time, a positive factor for PGMs, at least in the short term, is the relaxed stance on environmental standards by the current U.S. administration; this may offset the negative effects of the imposition of the U.S. tariffs that have not been fully implemented yet, Norilsk Nickel notes. Sales of ICE cars in the USA in January-May rose by almost 6% compared to the same period last year, while sales of EVs increased by 2% only. This discrepancy indicates that Trump’s policy aimed at slowing the rapid adoption of electric vehicles may already have influenced the consumer behavior, Norilsk Nickel believes.
Another factor influencing the demand for PGMs in the automotive industry - the loading of PGMs in catalysts - is subject to pressure in the absence of new environmental standards in most regions of the world, except for the USA, Norilsk Nickel says in its review. In China, extended-range electric vehicles (EREVs) with a lower loading of PGMs are becoming increasingly popular.
The ongoing trend in Europe towards a decline in the share of diesel vehicles - that gained momentum after ‘Dieselgate’ and the emergence of petrol hybrids with similar levels of fuel saving - is also negative for platinum. According to the Norilsk Nickel’s review, the share of diesel vehicles on the market has fallen by 8% over the past three years, which puts pressure on demand for platinum because this metal is mainly used in diesel catalysts.
Taking into account all these factors, Norilsk Nickel expects the demand for platinum used in the auto industry to fall by 7% this year, to 2.7 mn ounces.
Johnson Matthey expects a 5% decline in automotive platinum demand in 2025, to 3.41 mn ounces, recalling that platinum is less dependent on a downturn in the auto market than palladium or rhodium.
WPIC expects a less significant decline in automotive demand for platinum this year - by 2%, to 3.052 mn ounces. This is up 11% compared to the average demand for platinum over the previous five years. In the first quarter, the platinum demand in this sector was 4% lower year-on-year, 753 thousand ounces, amid uncertainty over the U.S. tariffs. With slower-than-expected growth in EV demand and stagnation in the demand for ICE cars, a 2% increase in demand for platinum used for non-road vehicles (NRVs) partially offset a 7% decline in demand for platinum used for heavy-duty vehicles (HDVs), WPIC estimates.
Jewelry
The demand for platinum in the jewelry industry is expected to grow by 5% in 2025, to 2,114 mn ounces, according to WPIC, as platinum continues to benefit from its lower price compared to gold prices. In the first quarter, demand in this sector grew in all regions except India (due to lower exports amid the uncertainty over the U.S. tariffs), up 9%, to 533 thousand ounces. The strongest growth for the whole year is expected in China, up 15% year-on-year, to 474 thousand ounces, while demand in Europe is forecast to grow by 7% and reach an all-time high, according to WPIC.
The jewelry sector remains the fastest-growing area for platinum demand, largely driven by China’s jewelry manufacturers, but it is unclear whether the recent surge in platinum imports will develop into a long-term trend, Nornickel warns. In its review, Nornickel cites its industry insiders in Shenzhen, the hub of China’s jewelry manufacturing, as saying that many of these purchases of platinum are made without confidence in sustainable demand at later stages. “There is a risk that unsold platinum jewelry could be written off and re-exported to Hong Kong for sale on the secondary market,” the review says.
Johnson Matthey also notes that there is currently no evidence that the building-up of platinum stocks in the distribution chain converts into increased purchases of platinum jewelry by consumers.
Industrial and investment demand
According to the WPIC forecast, the industrial platinum demand is expected to decrease by 15% this year, to 2,111 thousand ounces, mainly due to the expected cyclical decline in demand in the glass making industry (by 58%, to 289 thousand ounces). In the chemical industry, demand is expected to fall by 6%, to 580 thousand ounces. Consumption is expected to grow in the petroleum products segment (by 25%, to 198 thousand ounces), in hydrogen energy generation (by 35%, to 59 thousand ounces), in medical equipment manufacturing (by 4%, to 320 thousand ounces), and electrical engineering (by 2%, to 95 thousand ounces).
The decline in the industrial platinum demand to its lowest level since 2020 is primarily due to shutting down the show-window glass making factory outside China following the capacity expansion in that country, Johnson Matthey says. Significant volumes of platinum were subsequently sold back to the market, and the global platinum consumption in the glass making industry plummeted by more than 40%, despite continued strong purchases by the fiber-glass sector.
According to WPIC’s May forecast, the investment demand is expected to fall by 2% year-on-year in 2025, to 688 thousand ounces, with inflows into ETF lower than last year, partly offset by strong growth in bar and coin investments in China and the USA.
Platinum ETFs showed steady inflows in 2025 that reflect growing confidence in platinum’s fundamental prospects, supported by some decline in supply, a weak recovery in recycling and the rising demand in the jewelry and investment sectors, according to a Norilsk Nickel’s review. As a result of the intensified trading of the COMEX platinum futures due to opening the long positions amid growing bullish sentiments, the net speculative interest turned positive for the first time in several years.
Johnson Matthey assesses the investment conditions for platinum as neutral: on the one hand, renewed inflationary pressures could negatively affect inflows into platinum ETFs as a non-dividend-paying asset; on the other hand, platinum could benefit from some investment flow to the ‘safe haven’ from the gold market. Price dynamics will ultimately be the main factor determining the investment demand, according to the JM review.
Supply
According to Nornickel’s estimates, global refined platinum production will decrease by 2% in 2025, to 7.1 mn ounces. Primary platinum production is expected to decrease slightly compared to last year, to 5.6 mn ounces. The decrease will be primarily in the USA. North America, with its high-grade palladium mines, is the only region where production may decrease significantly, since the Stillwater and Impala Canada projects operating in the country are unlikely to become profitable at current prices, Nornickel believes.
Production in South Africa is expected to slightly decrease due to ongoing “project optimization’’, although there will be no substantial correction due to cross-subsidization and low corporate debt. At the same time, operational difficulties in South Africa in the first half of 2025 may result in a decrease in its annual production below the targets set for the current year and the 2024 production level, which will affect the market balance, Nornickel warns. Russia’s palladium and platinum output will remain relatively stable in 2025, with moderate growth expected in 2026 due to the launching of the Chernogorsk deposit.
As for secondary production, Norilsk Nickel expects a slight increase this year (up 3% for platinum), but it is still significantly behind both expectations and the level achieved during the COVID pandemic. According to Norilsk Nickel’s review, the reasons for slow recovery in recycling are the increased service life of vehicles, as well as the reduced profitability of catalyst recycling and the reluctance of processors to recycle metal-containing materials amid low prices for PGMs.
Source: WPIC Platinum Quarterly Q1 2025
According to WPIC, global platinum production fell by 10% year-on-year in the first quarter, to 1.458 mn ounces. Primary platinum production was down 13% (1.086 mn ounces), which has been the lowest quarterly volume since the second quarter of 2020. The slump was primarily due to unusually heavy rainfalls in South Africa, and it was partially offset by a 2% increase in global platinum recycling volumes, to 372 thousand ounces.
Overall, WPIC expects platinum supplies to fall by 4%, to 7 mn ounces, in 2025, including primary platinum production by 6% (to 5.426 mn ounces, down 11% compared to the five-year-average before the COVID pandemic). Platinum recycling volumes will grow by 3%, to 1.573 mn ounces.
Forecasts
Norilsk Nickel projects a recovery in platinum demand and an expansion of the platinum deficit to 300 thousand ounces in 2026 with demand and supply growing by 1%, respectively.
The key short-term uncertainty for the PGM market is the impact of high import duties on the global economy, according to the Johnson Matthey’s review. There is a significant risk of reduced vehicle production (and, consequently, demand for PGMs) for both vehicle exporters to the USA and for the U.S. automakers affected by increased duties on materials and components. In addition, demand from industrial consumers may be affected by increased duties on some finished products and chemicals made from platinum. The trade conflict may also cause a lower consumer spending on luxury goods, such as jewelry.
On the other hand, the course taken by some major economies to increase defense spending may have a positive effect on demand for platinum group metals, JM notes. The focus on increasing mineral supply security and protective strategies could lead to building up the inventories of critical minerals (including PGMs) by consumers, investors and even governments. This could reduce market liquidity and increase price volatility, the JM’s report says.
Sergey Bondarenko for Rough&Polished
