As supply deficits continue to influence platinum markets, the precious metal has registered a 30% climb in its price so far this year. This is according to a report on commodity prices published in April by the World Bank.
This price increase has largely been driven by persistent supply deficits that have squeezed markets and exerted upward pressure on prices. Data from the World Platinum Investment Council released at the end of last year indicates that the supply side has seen deficits grow from 921,000 ounces in 2024 to 1.08 million in 2025.
The gap between supply and demand is growing because more investors are expressing interest in adding this precious metal to their portfolios and this has triggered competition between investors and other users of the commodity. Overall, demand for the metal has risen by 65% year-on-year from 2024 to 2025. Notably, demand for platinum by the jewelry industry has climbed by 8%, which is the largest climb since 2018.
The supply of the metal contracted by 4% in 2025. This drop was however partially offset by an increase of 10% in platinum recycling. South Africa, the largest producer of platinum globally, is projected to maintain its production rate this year. However, Russia, the other major platinum producer, is expected to see a drop in production due to challenges linked to the exit of equipment suppliers from its market.
Most mining equipment is made by Western countries, and Russia’s invasion of Ukraine prompted these firms to leave the country because of the sanctions imposed on the Kremlin.
While demand for platinum is forecast to reduce by 8% this year, prices are projected to remain elevated because of supply deficits that could reach 240,000 ounces, according to WPIC estimates. Conditions therefore remain bullish for the metal. Further support is expected from the general surge in precious metal prices, but this rally is expected to taper off as the drivers behind the rally gradually normalize.
South African companies that produce platinum have seen their revenues rise significantly. However, many of them are prioritizing giving dividends to their shareholders as opposed to investing the extra revenues in new production projects. These producers say they are taking this approach as they study whether the bump in prices has staying power before committing to capital-intensive long-term production increases.
While platinum enjoys its spot in the limelight due to its impressive rally thus far in 2026 and throughout last year, mining companies like Platinum Group Metals Ltd. (NYSE American: PLG) (TSX: PTM) are likely to leverage the elevated prices to bolster their balance sheets while observing whether this is the new norm or market conditions change.
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