On another note, Platinum ETFs and institutional investments have surged, with predictions for demand hitting 688,000 ounces by 2025. TD Securities analysts caution that this increase in ETFs is reducing the amount of freely available platinum.
The platinum supply crisis is getting worse
Even with optimistic market setups, demand isn’t slowing down. The issue on the supply side is even more pronounced.
The World Platinum Investment Council anticipates a shortfall of 966,000 ounces in 2025, marking the third consecutive year of deficits.
Currently, physical reserves are under 2.5 million ounces, which may only last two to three years given the current consumption rate.
South Africa, providing more than 80% of global platinum, continues to face challenges with power outages, mine closures, and lack of investment.
Moreover, the CEO of Impala Platinum recently indicated that current prices are too low to justify new mining ventures.
Platinum’s Industrial Edge: Utility Meets Scarcity
While cash is essential, platinum serves a functional purpose.
Over 80% of platinum demand stems from industrial applications, especially in the automotive sector. As global production of internal combustion vehicles rebounds, platinum consumption has surged.
GSC Commodity Intelligence suggests that a 1% drop in the EV market share could boost platinum demand by 25,000 ounces.
Furthermore, with the growing use of platinum in hydrogen fuel cells, chemical production, and green energy technologies, it’s becoming a crucial and economically appealing metal.
Platinum: 18 times rarer than gold yet half the price
Platinum is among the rarest metals globally. For every ounce of platinum mined, 18 ounces of gold are extracted. Yet, platinum currently trades for less than half the price of gold.
Historically, platinum has been valued above gold for many years, but that relationship shifted in the last decade. This historic connection seems poised to strengthen again.
$4,000 Platinum Scenario
Conditions appear ripe for dramatic price increases as supply dwindles, demand rises, and the gold-platinum price ratio reaches untenable levels. The idea of platinum hitting $4,000 per ounce doesn’t sound far-fetched; it’s more likely a matter of time.
While the market may seem stagnant, platinum is just beginning its journey.
As GSC’s trading manager Filker mentioned:
