Platinum Market Faces Deepening Deficit as Supply Drops and Demand Shifts

Platinum

Strong Investment and Jewellery Demand Drive Q1 Growth

The platinum market faces deepening deficit in 2025 as demand surges and mine supply tightens, according to the World Platinum Investment Council (WPIC). In Q1 2025, total global demand rose 10% year-on-year to 2,274 koz. This growth was largely driven by a sharp increase in investment demand, which compensated for declines in both automotive and industrial sectors.

Automotive demand fell by 4% to 753 koz in the first quarter. However, the WPIC noted that market resilience remained, despite mounting uncertainty from evolving U.S. tariff policies. Meanwhile, jewellery demand rose by 5% to 2,114 koz, led by strong recovery in China. Platinum’s widening discount to gold has attracted new buyers, particularly in the Asian jewellery market.

Sterck, WPIC’s strategist, stated that jewellery demand “is moving so quickly that we may not have captured the total upside.” He emphasized China’s outsized influence on the latest demand momentum.

Ongoing Mine Disruptions and Policy Risks Deepen 2025 Deficit Forecast

On the supply side, total Q1 output dropped 10% year-on-year to 1,458 koz. Mine supply fell across all major regions except Africa, with South Africa’s output down 10% due to heavy rainfall. Recycling rose by just 2% to 372 koz, not enough to compensate for reduced mining activity.

As a result, the platinum market posted a first-quarter deficit of 816 koz—the largest single-quarter deficit in six years. WPIC has now revised its full-year 2025 deficit forecast upward to 966 koz, reflecting worsening structural constraints.

WPIC projects 2025 supply will fall by 4% to 6,999 koz—the lowest level in five years. Recycling is expected to rise 3% to 1,537 koz, helped by a slight uptick in spent autocatalyst recovery. However, this remains well below pre-pandemic levels.

Total demand in 2025 is forecast to decline 4% to 7,965 koz. This includes a 2% decrease in automotive platinum demand, despite slower-than-expected EV adoption. WPIC expects U.S. tariff uncertainties, especially under the Trump administration, to continue disrupting global PGM flows and investor behavior.

Sterck warned that market volatility may persist: “Trade distortions and significant metal flows are likely outcomes of this uncertain geopolitical environment.”

The Metalnomist Commentary

Platinum’s third consecutive annual deficit highlights a widening disconnect between structural supply limitations and fragmented demand dynamics. While China’s jewellery surge offers short-term upside, geopolitical risk and policy distortion—particularly around U.S. tariffs—may define market direction through 2025.