Platinum Price 'Could Hit $1200' Amid 2025 Supply Deficit
Thursday, 5/29/2025 13:30
Platinum Week sentiment positive despite autocat decline...
The PRICE of PLATINUM could have further to run from this month's sudden 2-year highs according to leading analysts.
But while new mine supply will again fail to match the size of demand
for the 3rd year running, platinum's market deficit will continue to be met by ample stockpiles of the industrial precious metal, capping its 2025 investment potential.
"The platinum market is expected to be in a deficit for a third consecutive year in 2025," says consultancy SFA (Oxford) in analysis published by precious metals refiners Heraeus.
"But this has not been reflected in the price...and plenty of stock remains available in 2025."
"Platinum's benign long-term demand outlook will encourage investors to buy on dips," agrees specialist consultancy Metals Focus, also launching its latest market analysis last week, "but plentiful inventory will cap the upside."
Still finding its largest single industrial use in autocatalysts to reduce harmful emissions from fossil-fuel engines, platinum peaked above $1100 per Troy ounce this Monday for the first time since May 2023 after jumping by 10.5% as mining executives, refiners, bankers, dealers, traders and analysts met for London Platinum Week.
That beat the platinum price spike made during last year's event.
"China was a very good physical buyer at the platinum price around $950," Reuters quotes one precious metals trader, after new data said the world's No.1 manufacturing economy imported the most in a year last month, jumping by almost one-half from March's figure.
"The spike above $1000 will mute this demand."
Last week also saw hedge funds and other speculators trading Nymex platinum futures and options on the CME derivatives exchange turn bullish as a group for the first time since the start of April.
Data starting in 2006 says that the Managed Money category was never net negative on platinum prior to the Dieselgate scandal which broke in September 2015, but those traders as a group have bet against the white precious metal 31.3% of the time since then.
A court in Braunschweig, Germany this week sentenced two former executives at nearby automaker Volkswagen to two and four years in prison respectively, and gave suspended sentences of more than a year to two other members of what the judge called a "gang" which cheated emission-testing systems.
Shares in VW (ETR: VOW3) are now trading back down at the sudden lows hit in the 60% crash of 2015, when the Dieselgate scandal began hurting sales of diesel-engine passenger vehicles and hitting sentiment towards platinum, as did
the surge in sales of battery electric vehicles.
The slew of new analyst forecasts published for Platinum Week all expect auto-sector demand for platinum and its sister palladium to decline once again in 2025.
That's despite a slowdown in the sales growth of BEVs, for which production is expected to rise by less than 1/5th this year according to the mining industry's
World Platinum Investment Council.
UK-based autocat and PGM refining specialist Johnson Matthey last week agreed the sale of its Catalyst Technologies (CT) business to Honeywell International for £1.8bn ($2.4bn). That news saw JM's share price (LON: JMAT) leap 30.7% to hit a 12-month high.
Like JMAT, the share price of Belgian autocat and refining specialist Umicore (EBR: UMI) last month hit its lowest level since early 2009, down 87.6% from UMI's record high of mid-2021.
Yet this month's Platinum Week found
sentiment "a lot more positive" towards the precious metal's outlook, says Adrian Hammond, executive director precious metals, oil and gas at South African brokerage SBG Securities.
"I suspect that's because the vaults are a little bit emptier. [Manufacturers] have been through a phase of destocking," while 'primary' supply from new mine output as well as 'secondary' scrap are both "quite weak".
Newly mined platinum output will fall 6% in 2025, the World Platinum Investment Council predicts, reversing more than twice the growth seen last year.
"We expect to see profit-taking near platinum's two-year high," Metals Focus says, "prompting a price correction. But we do expect that the metal could rally as high as $1200."
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