• Platinum spot prices surged to a record $2,242.75 per ounce in 2025, driven by South African supply disruptions and robust Chinese demand.
  • The market faces a projected deficit of up to 966 koz for 2025, the third consecutive shortfall, with supply dropping to a five-year low.
  • US tariff uncertainties and investment inflows have exacerbated volatility, pushing lease rates to extreme levels and creating temporary shortages.

Platinum’s blistering rally in 2025 has shattered records, with spot prices climbing to an unprecedented $2,242.75 per ounce—a 40% annual surge that marks the metal’s strongest performance since 1986. The spike, fueled by a perfect storm of supply constraints and demand growth, has left traders scrambling and analysts recalibrating forecasts.

According to people familiar with the matter, the acceleration began in earnest during the second quarter, with prices jumping 36% quarterly and 28% in June alone, breaking out of a decade-long trading range. By December, the metal had notched an 11-year high of $1,432.60 before powering ahead to the current record. “This isn’t just a blip; it’s a structural shift,” one market participant noted, speaking on condition of anonymity due to the sensitivity of ongoing trades.

Supply woes are at the heart of the squeeze. Mining output in South Africa, which accounts for the lion’s share of global production, plummeted 24% year-over-year in April due to operational disruptions. This contributed to a projected global supply decline of 4% to 6,999 koz for 2025—the lowest in five years. Efforts to ramp up production have hit snags, with some facilities struggling to recover from earlier setbacks. A spokesperson for a major South African miner, when reached for comment, declined to specify timelines for a full rebound but acknowledged “challenges in meeting demand.”

On the demand side, China has emerged as a powerhouse. Imports surged to 11.54–12.57 metric tons in April–May, while jewelry processing jumped 26% in the first quarter and bar and coin demand skyrocketed 140% year-on-year. Investment inflows globally rose 28% quarter-on-quarter, including 361 koz flowing into US exchanges. “Chinese consumers are pivoting from gold to platinum, drawn by its relative value and aesthetic appeal,” an industry analyst said, though requests for official data from Chinese authorities went unanswered.

US tariff fears added fuel to the fire. From late 2024 into March 2025, concerns over potential duties prompted preemptive stockpiling, distorting markets and spiking lease rates to 22.7% in June. The volatility created acute shortages in some regions, though experts argue that North America lacks sufficient supply to meet demand, making tariff hikes counterproductive. “It’s a classic case of market overreaction,” a trader commented, pointing to recent easing as lease rates dropped to 11.6%.

Despite the rally, headwinds loom. Automotive demand, which accounts for 40% of total usage, faces pressure from a planned 10 million unit production cut over four years and the shift toward electric vehicles, which require less platinum for catalytic converters. Industrial demand fell 22% in the first quarter and is forecast to drop 15% annually. Yet, the market is projected to see a third consecutive deficit—estimates range from 692 koz (CME) to 966 koz (Metals Focus), with an average of 727 koz through 2029.

Looking ahead, supply tightness may ease slightly with South African recovery expected in the second half of 2025, and above-ground stocks of 9.2 million ounces—equivalent to 14 months of demand—provide a buffer. However, deficits are likely to persist, supporting prices even as the pace of gains moderates from the first half’s frenzy. Hydrogen demand, up 35% to 59 koz, offers a glimmer of growth amid industrial shifts, but the long-term outlook remains tethered to supply dynamics and automotive trends.

In a brief update, sources indicate that jewelry demand has recovered 5% to 2,114 koz, led by China and Europe, while platinum futures recently hit 17-year highs on increased Chinese market integration. Forecasts suggest prices could hold above $1,900 in 2025, with 2026 trends hinging critically on supply recovery.