Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The platinum market has reached its steepest supply crunch in 20 years as rising demand overshadows available resources for the third consecutive year. A perfect storm of steady industrial and investment demand, along with worsening supply constraints, pinches already thin resources.
More recently, the Trump administration’s aggressive tariff posture has prompted investors to onshore vast amounts of the metal to skirt potential import taxes. Depleted reserves across the board have spiked borrowing costs to the highest point in years, signaling a considerably strained market.
Platinum’s Entrenched Supply Crunch
The platinum market has suffered from a sharp supply slump for two straight years, and all signs point to more imbalance on the horizon. The World Platinum Investment Council (WPIC) estimates consumption to outpace supply by 966,000 oz in 2025, marking the third year of deficits. The market is being squeezed by restructuring industrial demand, revitalized investment interests, and supply-side complications.
Industrial Use Evolves
Although the rise of electric vehicles (EVs) has changed platinum’s demand landscape, the automotive sector remains the market’s dominant driver, comprising nearly half of overall purchases. In fact, the auto industry is forecasted to consume 3.25 million ounces, charting an eight-year record.
Retail Demand Reignites
Investment demand posted robust growth thus far in 2025, rising 300% year-over-year. That’s even more impressive considering 2024 levels had already risen by 700% from the prior year. In total, investment purchases are expected to reach 688,000 ounces and account for 9% of total demand. This would mark the third year of positive investment inflows, further fueling platinum’s recent hot streak.
Supply is Running Dry
As demand climbs on the industrial and investment side, platinum supply is struggling to keep up. Following years of surpluses, 2025 is on track to become the third year of shortfall, with above-ground stockpiles set to fall by 31% and total supply to decline by 4%.
Mining production, making up almost 80% of available platinum, is anticipating a 6% reduction in output in 2025, stressing resources. The only positive figure on the supply front is recycling, which is set to grow by a modest 3%.
Overall, the confluence of steadily increasing purchases and supply restrictions has squeezed the platinum market to its tightest point in two decades.
Tariff-Fueled Demand Strains Inventory
Trump’s on-again, off-again trade war has plunged the precious metal space into chaos, with investors in constant fear of new tariffs. Most recently, the admin’s hiking of copper taxes spurred a wave of platinum demand as US-based investors sought to skirt future tariffs by onshoring physical products now.
Similar to silver, this preemptive buying saw 500,000 ounces of platinum crash into NYMEX inventories, eventually hitting the second-highest peak in history. The unforeseen spike in buying zapped platinum holdings in major foreign exchanges, kicking borrowing costs up to 40% from near-zero levels only months ago.
What does the future hold for platinum?
Following a more than 60% return year-to-date, platinum is starting to turn investors’ heads, especially as gold’s rally seems to slow. Bullish sentiment, supportive macroeconomic conditions, and upbeat forecasts all suggest more room to run for the metal. The WPIC predicts supply deficits will persist through 2029, averaging 727,000 annually, indicating further upward price pressure.