Platinum Frenzy Continues!

Supply constraints have made platinum one of the best-performing commodities this year, and the buying frenzy shows no signs of stopping, potentially driving prices even higher.

Industry experts note that tariff concerns have led to a continued influx of platinum into U.S. warehouses, while imports in China—another major market—have consistently exceeded expected domestic consumption. This dynamic has resulted in shortages at trading hubs in London and Zurich, with no clear assessment yet of how low inventories have fallen.

Jay Tatum, portfolio manager at Valent Asset Management, stated that when markets face such supply squeezes—whether due to good reasons, bad reasons, or unique circumstances—it pulls raw materials into the spotlight. He also emphasized that platinum lease rates indicate the severe tightness is far from over.

The largest consumers of platinum are the automotive and jewelry industries, but high borrowing costs pose risks for manufacturers using platinum to produce chemicals, glass, lab equipment, and other goods. Industrial users typically opt for leasing rather than outright purchases to reduce capital intensity.

Currently, platinum lease rates remain above 10%, down from over 35% in July but still well above the near-zero norm, signaling sustained market demand.

Data shows that U.S. investors have sold 215,000 ounces of platinum via ETFs this year, yet over 290,000 ounces were added to New York warehouses in just the past three weeks—a trend linked to tariff-driven stockpiling. Meanwhile, China imported a record 1.2 million ounces in Q2.

Year-to-date, platinum prices have surged over 45%, peaking at $1,438/oz before sharply retreating to hover above $1,300.

On the demand side, industrial uses (accounting for a third of platinum demand) have suffered due to weak fuel-vehicle sales. However, soaring production costs and supply disruptions in South Africa have bolstered bullish sentiment.

Craig Miller, CEO of Valterra Platinum Ltd., noted that the price rebound has lifted profitability for ~90% of miners, up from just 60% late last year. But this still isn’t enough to spur output expansions—prices would need to rise another ~50%.

Marwan Younes, president of Massar Capital Management, agrees this supply-demand imbalance could set the stage for a sharp platinum rally, with China’s import surge being a key driver of this year’s price spike.