According to Securities Daily, Zhang Wenbin, Head of China Market Research at the World Platinum Investment Council, stated at the “Platinum Season Talk & Platinum New Era: China's Pricing Power and High-Quality Market Development” conference on December 3 that the global platinum market is projected to experience a significant shortage in 2025. The primary driver of price increases is the continued depletion of above-ground inventories. A slight surplus is projected for 2026, but this does not signal a trend reversal in market scarcity.

The rise in platinum prices primarily relies on the ongoing depletion of above-ground stocks, which serves as the core driver for price increases. From a demand perspective, the current reduction in total demand struggles to sustain a strong upward price trajectory. However, over the past three years, above-ground stocks have cumulatively declined by 42%. This scarcity has heightened price sensitivity, making the platinum market highly reactive to supply fluctuations.

Compared to other precious metals, platinum leasing rates have risen for several consecutive months and remain persistently elevated. This phenomenon is primarily driven by tight spot platinum supply. Even with substantial depletion of above-ground stocks projected for 2025, leasing rates are unlikely to ease significantly, reflecting the market's heightened sensitivity to spot platinum shortages.

The global platinum market remains tight in 2025, with an anticipated supply-demand gap of nearly 21.6 tons and further declines in above-ground inventories. Mine supply is projected to decrease by 5%, while recycled supply is expected to grow by 7% year-on-year. Total supply is forecast to decline by 2% to 221.7 tons in 2025.

Global platinum demand is projected to decline by 5% to 243.3 tons in 2025. While industrial and automotive usage decreases, global jewelry demand is forecast to rise by 7%. Global investment demand also hits a five-year high of 23 tons. China emerges as the primary driver of global platinum investment, while other regions face constraints from costs and policies, resulting in a pronounced divergence in investment patterns.

In 2025, global investment in platinum bars and coins is projected to surge by 73%, reaching a four-year high. This growth is almost entirely driven by China, where demand is expected to nearly quadruple year-on-year, accounting for nearly 70% of global total—up from just 15% three years ago. Chinese investment demand (excluding platinum bars over 500 grams) is forecast to reach 7.2 tons.

Investment is projected to remain the platinum market's primary variable in 2026. Global platinum supply is forecast to increase by 3% to 230.3 tons, the highest level since 2021. Mine production will remain stable, while recycled supply may see double-digit growth. Global platinum demand is expected to reach 229.7 tons in 2026, with declines in automotive catalysts and jewelry demand offset by a recovery in industrial demand. A supply-demand gap of at least 19 tons per year is projected to persist through 2029.

China's updated VAT policy also represents a significant variable for this year's platinum market. Imported platinum sold through the Shanghai Gold Exchange no longer qualifies for VAT exemption. Following the new policy implementation, VAT treatment has been unified between the Shanghai Gold Exchange and over-the-counter markets.

Although the tax policy adjustment has created a premium of nearly 13% for SGE prices relative to London prices in the short term, rendering SGE trading volumes no longer an accurate reflection of China's platinum demand, the new policy will promote growth in recycled supply over the long term. China's platinum demand is expected to remain stable.

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