Platinum price hits five-year high

Platinum prices have surged to their highest level in five years as global supply tightens and investors position ahead of policy changes in China.

The spot platinum price was $1,658.68 per oz. on Thursday morning after a 6.4% gain on Wednesday to $1,646 per oz., the biggest intraday move since 2020, while New York futures gained 4.1%, BMO Capital Markets said in a note. The benchmark spot contract traded $53.45 above U.S. futures, up from a $28 premium a day earlier, signalling a shortage of physical metal.

Platinum will only be balanced “by net selling of investment holdings” back into the market, a dynamic expected to keep prices volatile, BMO commodity analysts Helen Amos and George Heppel said on Thursday. Traders and consumers are rushing to move metal into China before a value-added tax rebate is withdrawn on Nov. 1, the analysts added.

With a 62% jump since Jan. 1, spot platinum is now outpacing gold and rivalling silver as the year’s top performing commodity. The gains built from last December to June as the metal used in fossil-fuel autos’ exhaust systems broke out of its post-pandemic trading range, according to the World Platinum Investment Council.

It expects continuing deficits through the decade as new mine supply fails to expand quickly enough to meet rising industrial and investment demand, particularly from the hydrogen and fuel-cell sectors.

Outstripping supply

“The big driver behind it is the recognition by the broader market that the demand for platinum is far outstripping the supply, and the supply of platinum is highly inelastic,” Shree Kargutkar, senior portfolio manager at Sprott Asset Management, said in emailed comments. “There are certainly very few ways of substituting away from platinum that we know of right now.”

Global demand of about 8 million oz. per year compares with total supply of about 7 million oz., including recycling, producing a 1-million oz. deficit. Shortfalls have persisted for the past few years and are unlikely to disappear soon, Kargutkar said.

Roughly 40% of platinum demand comes from autocatalysts, another 40% from industrial uses such as glassmaking and chemical processing and the rest from jewellery and investment. With electric vehicle sales slowing, hybrid and gasoline-powered cars continue to underpin consumption.

“Hybrids still require a catalytic converter and platinum or palladium,” Kargutkar said. “Overall, I would say the net effect has been a bit of a surprise in terms of where people thought the demand for platinum and palladium would be five years ago, today, and where it is materializing right now.”

Producers cautious

Producers are responding cautiously to the rally. Tharisa (JSE: THA; LSE: THS) plans to spend $547 million over the next decade converting its open-pit platinum-group metals mine in South Africa to an underground operation, with the first shaft due in 2026 and output targeted at about 200,000 oz. annually.

Anglo American (LSE: AAL) has spun off its platinum assets into a separate entity, Valterra Platinum (JSE: VAL). Impala Platinum (JSE: IMP; US-OTC: IMPUY), widely known as Implats, is shutting its Lac des Iles mine in northern Ontario next May, the company said in July. There’s been no word if the move is being reconsidered. A company spokesperson said at the time the long-term trend for the metal isn’t favourable. 

Northam Platinum Holdings (JSE: NPH) CEO Paul Dunne said in the company’s 2025 results presentation that “recent price appreciation is offering some relief to the PGM sector. However, it is not yet at levels that will support sustainable mining across the industry and certainly not the much-needed development of new operations.”

He added, “we remain cautious and will maintain our focus on safe production and efficient mining at the right cost, enabled by our strong liquidity.”

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