Platinum continued its steep rally and climbed to its highest price level in 17 years amid tightening supply and trading activity on a newly launched futures contract in China. Since last Thursday, spot contracts for the metal have climbed about 2% on a daily basis and on Wednesday, they appreciated by 1.9%.
The price of platinum has more than doubled in 2025 and is on course for its biggest climb in a year from the time Bloomberg started tracking its prices back in 1987.
Several factors have helped to fuel this price rally. On the London market, tightening supply drove prices up. Banks have also been stockpiling the metal in the U.S. as concerns about looming tariffs on platinum imports cause traders to preemptively increase their stocks in the country so that they avoid the first wave of the tariffs. China has also increased its imports of platinum in 2025, and futures of the metal have recently started being traded on the Guangzhou Futures Exchange.
To illustrate how the supply of platinum has become constrained, the annualized interest rate on borrowing the metal in London now stands at 14%. This is a high level when historical data is analyzed and it shows that traders of platinum aren’t as willing to let go of their physical stocks at a time when supplies are dwindling.
Ed Sterck, the World Platinum Investment Council’s research director, says the competition for the metal is three-pronged between the Chinese market, U.S. market and Europe. All these major markets are competing for the limited supplies of the metal, he adds. He points to the high lease rates as proof that the metal is in short supply.
The rally in the price of the metal has been boosted by increased investor interest in precious metals in 2025. This investment interest has seen gold, silver and platinum all record major upticks in their prices. Silver has seen its price double as a result.
As traders await the outcomes of the Section 232 probe by Washington, huge amounts of platinum in excess of 600,000 ounces have been moved to vaults in the U.S. This is a much higher amount than is usually held in the country.
Meanwhile, futures trading in platinum has started in China. While this trading isn’t yet open to traders from other parts of the world, speculation has driven up prices and when plans to open GFEX vaults internationally materialize, platinum will be rushed to China as traders seek to benefit from arbitrage opportunities presented by Chinese prices of the metal being higher than those in other markets.
There is a lot happening that is reshaping the market, and major platinum producers like Platinum Group Metals Ltd. (NYSE American: PLG) (TSX: PTM) will be keeping their eyes on these shifts so that they take maximum advantage of the rush for this precious metal.
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