Platinum Price Surges Past US$1,600 Mark to Fresh 12 Year High
The platinum price broke above US$1,600 per ounce on September 29 (Monday), its highest level since April 2013.
What’s moving the platinum price? A number of factors are at play in this notoriously volatile market.
As a precious metal, nearly a quarter of demand for platinum comes from the jewelry sector. When gold prices are high, as they are now at nearly US$3,900 an ounce, platinum jewelry becomes an attractive, lower cost alternative.
With more than 70 percent of demand for the metal coming from the industrial and automotive sectors, the platinum market is highly price sensitive to economic cycles. However, despite the current economic uncertainty that’s driving gold higher, platinum prices are being buoyed by stable demand in the auto sector, emerging demand in the hydrogen fuel cell industry, and persistent supply challenges out of major platinum producing nations like South Africa.
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…
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