Platinum Reserves Melting Fast!

Platinum fundamentals have pulled off a remarkable feat this week. The World Platinum Investment Council (WPIC) released its latest quarterly update on Monday, and the numbers are impressive.

Production decline with major impact

Platinum production in South Africa, the world's largest producer, fell by a whopping 38% compared to the previous quarter. This is not entirely unexpected; the first quarter is traditionally a weak period in South Africa. What is striking, however, is that production is also down 13% compared to the first quarter of 2024! This opens the door to a market which is already under pressure.

Increasing demand from investors

And that’s not all: investment demand for platinum has increased significantly. In the first quarter of this year, investors bought more than four times as much physical platinum compared to 2024! This is a sign that attention for platinum is growing and that investors are beginning to appreciate the potential of this precious metal.

A disturbing shortage

These developments mean that the expected physical shortage in the platinum market in 2025 has now been set at 966.000 ounces, a significant increase from the previous estimate of 539.000 ounces. This shortage could therefore have more serious implications than previously thought.

Expected shortages and declining inventories

We recently revised our estimate of global platinum supplies. Currently, there are only about four months of platinum left in stock worldwide. Here is the clarification with the latest figures from the WPIC:

• Expected production for 2025: 6.999.000 ounces
• Expected Demand: 7.965.000 ounces
• Expected Shortage: 966.000 Ounces

Above-ground platinum inventories are expected to fall to 2025 ounces by the end of 2.160.000. This means that only the equivalent of 3,25 months of global physical platinum demand remains available. This is a sharp decline, as at the beginning of 2023, inventories were over 4 million ounces. The majority of this supply is now gone, so where are the remaining supplies? In China.

The role of China

It is not expected that the Chinese will simply monetize their strategic platinum stockpile. In fact, it seems that demand for platinum in China is only increasing. More than ten new platinum showrooms will open in Shenzhen in 2025, and manufacturers are reporting long waiting lists and order books that are full well into the second quarter. A golden opportunity for investors!

Platinum in Europe

In Europe we are seeing an increasing popularity of platinum. We are currently busy replenishing our vaults with physical platinum, so that we can continue to provide our customers with 100% allocated metal. The supply in Europe is becoming increasingly scarce and almost all available platinum is new from Switzerland. Delivery times are really increasing everywhere!

Increasing scarcity

Both WPIC and Johnson Matthey’s analysis confirms that the physical platinum market is tightening. Platinum is a valuable addition to any precious metals portfolio. Of course, there are no guarantees about future price developments—no one has a crystal ball. But this market is certainly intriguing.

Frequently Asked Questions

What are the key developments in the platinum market?
South Africa's platinum production is declining while investor demand is increasing, leading to an expected shortfall of 966.000 ounces in 2025.

Why are platinum reserves so important?
Falling inventories mean less supply on the market, which can put pressure on prices and create investment opportunities.