- Severe Supply-Demand Imbalance: 2024 deficit: 995 koz (largest since 2013)
- Mining Supply Erosion Accelerates: 2025 mine supply to drop 5% YoY to 5,506 koz due to
- Restructuring, sustainability focus, and reduced inventory releases
- Demand Dynamics Split: Auto demand down 1% in 2025 (Europe’s diesel decline, North America HDV slump)
- Industrial demand falls 14% (glass sector slowdown), offset partially by hydrogen growth, Jewellery demand up 2%
Refined platinum mining supply in Ozk
Source: World Platinum Investment Council, Equity Axis Research
Harare- The platinum market is grappling with its most severe supply-demand imbalance since 2013, with deficits projected at 995 koz in 2024 and 848 koz in 2025, driven by structural supply constraints and volatile investment inflows.
While the 2025 deficit shows a marginal easing compared to 2024, both years reflect systemic vulnerabilities in supply chains and shifting demand dynamics that threaten long-term market stability.
The primary driver of these deficits is the sustained erosion of mine supply, which is expected to decline by 5% year-on-year in 2025 to 5,506 koz. This decline is a result of ongoing restructuring, producers’ focus on sustainability, and reduced releases from work-in-progress inventories.
Zimbabwe, a key global producer, faces additional challenges such as power shortages, rising production costs, and underinvestment in new projects. These factors exacerbate the global supply crunch, making it difficult for the market to meet demand.
Recycling supply, another critical component of platinum availability, remains a significant weakness. Total recycling is expected to increase by just 1% in 2025 to 1,496 koz, but this figure has been revised down by 278 koz since the last projection.
Recycling volumes are almost 20% below the 10-year average, primarily due to shortages of end-of-life catalytic converters and inefficient collection systems.
While increased automotive deregistration rates offer some upside potential, systemic improvements are needed to unlock this supply. Without such improvements, recycling will continue to underperform, further tightening the market.
On the demand side, the picture is mixed. Automotive demand, which accounts for a significant portion of platinum consumption, is expected to decline by 1% in 2025 to 3,102 koz. This decline is driven by falling diesel market share in Europe and lower heavy-duty vehicle (HDV) output in North America, though these losses are partially offset by 6% growth in catalysed vehicle production in other regions.
Industrial demand is also expected to decline by 14% due to a cyclical slowdown in sectors like glass manufacturing, despite growth in hydrogen and petroleum applications.
Jewellery demand, however, remains a bright spot, with a 2% year-on-year increase projected for 2025, reaching 2,027 koz the first time it has breached the 2 Moz mark since 2019. This growth is fueled by platinum’s price discount to gold and its substitution potential for white gold, which has increased fabricator and retailer support for the metal.
Investment demand, though expected to fall by 14% in 2025, has been revised up by 185 kodue to robust inflows into ETFs and exchange stocks. Platinum’s growing discount to gold and its role as a hedge against inflation and geopolitical uncertainty are attracting investors. However, this speculative interest introduces volatility, as financial actors rather than physical demand are driving price movements.
Despite these deficits, platinum prices have struggled to rally decisively. This disconnect stems from several factors, including speculative overhangs, hidden above-ground stocks, and weak industrial sentiment. Prices may see episodic spikes toward $1,100/oz in 2025, but sustained gains above $1,200/oz will require tangible evidence of inventory drawdowns and a recovery in the automotive sector neither of which are imminent.
The risks for 2025 are significant. A risk-off shift in financial markets, such as Fed rate hikes, could trigger ETF outflows, unmasking underlying demand weakness. Mine disruptions, particularly in South Africa and Zimbabwe due to power crises and in Russia due to geopolitical tensions, threaten another 3–5% supply shock. Any marginal gains in recycling are unsustainable without systemic overhauls, leaving the market vulnerable to further tightening.
Strategic Responses in Southern Africa
The platinum sector in Southern Africa is undergoing a profound contraction as companies respond to persistently weak metal prices and structural market challenges. Major producers are scaling back operations, delaying projects, and implementing workforce reductions, signaling a strategic shift from growth to survival.
Tharisa’s Karo Mining Project has pushed back the production start date of its $391 million platinum mine to the second half of 2026, citing unfavorable price conditions. This delay removes an anticipated 120,000 ounces of annual supply from the market, exacerbating long-term supply constraints.
Similarly, Zimbabwe’s Zimplats has slowed progress on its $1.8 billion expansion plan, deferring critical upgrades like a smelter project and reported its first loss in decades., while Mimosa Platinum abandoned a $100 million development initiative and fired 33 managers last year due to falling global prices.
These retrenchments reflect margin pressures across the industry, with production costs now perilously close to or exceeding current platinum prices of around $950 per ounce.
The ripple effects of these cutbacks extend beyond corporate balance sheets. Implats, a key player in the region, announced a group-wide restructuring plan targeting a 14% reduction in platinum group metal (PGM) production between 2025 and 2027, including approximately 4,000 job cuts.
This downsising refleects the severe financial strain on producers, even as global platinum market deficits widen. The disconnect between shrinking supply and stagnant prices highlights a market paradox: above-ground inventories and weak industrial demand continue to suppress price momentum, despite the tightening physical supply.
Automotive sector thrifting, slow adoption of hydrogen technologies, and investor skepticism further compound the challenge, leaving producers caught between rising costs and insufficient revenue.
Investor confidence has also eroded, with share prices for major firms like Implats and Sibanye-Stillwater plummeting 30–40% in 2024, reflecting dwindling faith in the sector’s near-term recovery.
Producers must prioritise cost rationalisation and strategic diversification. Transitioning to renewable energy sources, such as solar and wind, could mitigate the financial burden of unreliable grid power, while automation technologies could reduce labour dependency and improve efficiency. Diversifying into hydrogen economy partnerships or focusing on high-margin byproducts like palladium and rhodium may offer revenue stability.
Governments, meanwhile, must engage proactively by offering tax relief, upgrading infrastructure, and fostering public-private partnerships to reduce export costs. Community stabilisation efforts, including worker retraining programs and local content mandates, will be critical to mitigating the human cost of downsising.
The path forward demands a delicate balance between austerity and innovation. While the platinum market’s structural deficits may eventually reward resilient producers, survival in the short term hinges on swift adaptation to the new reality of weak prices and elevated risks.
For Southern Africa, home to the world’s largest platinum reserves, the stakes are existential. Without coordinated action among miners, governments, and communities, the region risks a downward spiral of disinvestment and socioeconomic decline.
Yet, this crisis also presents an opportunity to reimagine the sector’s future, leveraging sustainability and technology to build a more resilient, diversified platinum industry. The time for decisive action is now.
Equity Axis News
