Mine Supply Weakness and Recycling Constraints
The production remains the most significant issue in 2025. Global refined output dropped to 1.45 million ounces in Q2 2025, down from 1.54 million in Q2 2024. South Africa, the world’s top producer, was hit by heavy rainfall in Q1, and Q2 output still came in 8% below 2024 levels. The WPIC expects South Africa’s total mine supply to fall 6% this year. On the other hand, analysts forecast a 4% decline in Zimbabwe and a 26% drop in North America. However, they expect Russia to see a minor 1% increase.
Meanwhile, the recycling supply is improving but remains weak. Secondary supply rose 6% year-on-year to 1.6 million ounces, driven by gains in automotive recycling. Still, the WPIC notes that levels are historically low. According to WPIC, platinum recycling is far less responsive to price than palladium or rhodium. As a result, even with prices above $1,450 in July, scrap inflows remain limited.
Shrinking Stockpiles and Mixed Demand Outlook
Total platinum supply is expected to decline 3% in 2025 to 7.03 million ounces. At the same time, aboveground stockpiles continue to shrink, with inventories projected to fall 22% this year to 2.98 million ounces, down from 5.51 million in 2022.
On the demand side, the outlook remains mixed. Industrial use is expected to drop 22%, and automotive demand could fall 3% due to slower car production. However, WPIC expects jewellery demand to increase 11% this year to 2.23 million ounces, driven by platinum’s discount to gold. Wholesalers in China are driving a 42% surge in fabrication as they shift focus from falling gold sales.
In 2025, tariff uncertainty has added volatility to investor demand. Physical platinum flowed into the U.S. earlier this year on fears of trade restrictions. While those concerns briefly eased, they resurfaced after copper tariffs were announced. The geopolitical risks involving South Africa continue to threaten supply.
Despite a decline in overall demand, the supply deficit remains substantial. Although prices are rising, they are still not high enough to incentivize new mining projects. Deep-level mining remains costly, and even a 50% increase in basket prices is unlikely to trigger fresh supply. For now, structural tightness continues to support a bullish outlook for platinum prices in 2025.
