Platinum Price Surges Past US$1,600 Mark to Fresh 12 Year High

Platinum supply under pressure

Supply constraints are an ongoing trend in the platinum market and a major driver of prices for the metal in 2025.

“The way I see it, platinum’s recent break of $1,600/oz price level for the first time since 2013 shows that supply is under pressure,” Eugenia Mykuliak, founder and executive director of global financial services provider B2PRIME Group, commented in an email to the Investing News Network. “South African producers, responsible for nearly 70 percent of global output, face a lack of energy and underinvestment, while recycling volumes are weak. That’s why the World Platinum Investment Council sees an 850 koz deficit in 2025, marking three years in a row of shortage.”

In its Q2 2025 Platinum Quarterly, the World Platinum Investment Council (WPIC) predicts that global platinum mine supply will drop by 6 percent to 5.43 million ounces for this year.

Heavy rainfalls and flooding in top producer South Africa in the first quarter of the year had a major impact on an industry already reeling from high-cost electricity and dwindling reserves.

In late August, Paul Dunne, CEO of Northam Platinum (JSE:NPH) in South Africa told Reuters that higher platinum prices in 2025 will likely not do much to alleviate the pressures facing platinum group metals (PGM) production in the country.

“Recent price appreciation is offering some relief to the PGM sector,” he said in a statement. “However, it is still not yet at levels that will support sustainable mining across the industry and certainly not the much-needed development of new operations.”

Suffice it to say that problems in the supply side of the market will continue to support platinum prices over the longer-term.

Platinum demand seen as sustainable

As for platinum demand, Mykuliak sees a few key important drivers including auto catalysts for hybrid vehicles, increased hydrogen adoption for industrial uses and Chinese demand for platinum jewelry as an alternative to gold.

In the automotive industry, platinum is used in catalytic converters for vehicle exhaust systems for emissions control. The rise of electric vehicles (EVs), which do not require catalytic converters to control emissions, is expected to cut into platinum demand over time.

However, high costs and range anxiety are leading auto buyers to choose hybrids over battery EVs. Because hybrid engines still require catalytic converters, the auto sector continues to be a reliable source for platinum demand.

In the hydrogen sector, platinum has a role as a catalyst in the proton exchange membrane electrolyzers used for green hydrogen production and in hydrogen fuel cells. The WPIC has noted that the hydrogen market be “a meaningful component of global demand by 2030 and potentially the largest segment by 2040.”

As for jewelry demand, the WPIC is predicting an increase of 11 percent year-on-year to 2.23 million ounces in 2025. China is expected to represent more than one quarter of that growth as the fabrication of platinum jewelry in the region is expected to grow by 42 percent to 585,000 ounces.

Platinum price outlook

The platinum price has since pulled back from the US$1,600 level to US$1,558 per ounce in midday trading on Thursday (October 2). But a correction is expected in the short-term, explained Mykuliak, who believes the fundamental outlook for platinum is still a positive one.

“Looking ahead, I expect volatility. My base case is a US$1,650-US$1,750 range by the year-end, with possible dips toward US$1,450 if profit-taking intensifies,” she said. “On the upside, if South African power disruptions worsen or hydrogen policies accelerate, US$1,850-US$1,950 is realistic, with US$2,000 also within reach.”