Platinum Hits All-Time High Amid Supply Shortages and Shifting EU Policy

Global commodity markets witnessed a significant surge in platinum prices on Friday, December 26, 2025, as the precious metal achieved a new absolute peak. Reports indicated that quotes for the metal climbed to $2,413.62 per ounce by 03:04 GMT, representing an 8% gain during that trading session, though another source documented an increase of 6.60%. This dramatic spike capped a substantial rally; since the start of the current year, the metal has appreciated by over 150%, marking the largest annual increase recorded since Bloomberg began tracking data in 1987. This current upward momentum was sustained by the tenth consecutive session of gains, the longest such streak observed since 2017.

The primary driver behind this price escalation is a critical imbalance between market demand and available supply. This situation has been severely exacerbated by ongoing production challenges in South Africa, the world’s foremost platinum producer. The World Platinum Investment Council (WPIC) projects a supply deficit reaching approximately 692,000 ounces for the entirety of 2025, which would constitute the third consecutive year of shortfall. This deficit has already depleted upstream inventories by 42%, leaving less than five months' worth of supply available to cover demand. Furthermore, uncertainty stemming from a Washington investigation under Section 232 potentially restricts access to over 600,000 ounces of platinum held in US stockpiles, thereby intensifying market tightness.

A second crucial element influencing trader sentiment involves the European Commission's recent revision of its policy concerning internal combustion engines (ICE). The initially planned outright ban on sales of new ICE vehicles by 2035 has been softened, a development welcomed by major European automakers such as BMW, Volkswagen, and Mercedes-Benz. The new, more adaptable framework mandates a 90% reduction in CO2 emissions by 2035, allowing for the use of biofuels and e-fuels to offset the remaining 10% of emissions. This policy moderation has bolstered industrial consumption of platinum, a key component in catalytic converters, as a slower shift toward electric vehicles sustains demand for traditional powertrains.

Investment dynamics have also played a substantial role in price action. Capital has notably flowed out of gold, which itself has risen by 65% year-to-date. Platinum, however, has outperformed, surging 120% since the year began. Evidence of the metal’s scarcity is reflected in high borrowing rates in London, where monthly rates approached 14%, signaling a strong reluctance among holders to part with their metal due to low physical availability. Analysts point to a fierce, three-way competition for the metal among the United States, Europe, and China, where newly launched futures contracts on the Guangzhou Futures Exchange have attracted speculative interest.

Looking at the supply side for 2025, primary mine production is set to decline by 5%, settling at 5.51 million ounces—a figure that sits 10% below the pre-pandemic average. Platinum output from Russia amounted to 677,000 ounces, a 1% decrease compared to the previous year. Although elevated prices have successfully spurred a 7% increase in secondary recycling efforts, this boost is insufficient to counteract the drop in mined volumes. Technical analysts observe that platinum’s parabolic ascent has finally energized mining stocks that were stagnant for years, citing the example of South Africa’s Valterra. Market watchers anticipate that the supply-demand equilibrium will only be restored in 2026, forecasting a minor surplus of 20,000 ounces, though this projected balance is unlikely to alleviate the current market pressures.