By Polina Devitt and Anushree Mukherjee
LONDON (Reuters) – Platinum prices are still room for even more up after a record-breaking quarter rally, analysts and traders said.
Metal prices skyrocketed 36% in the second quarter due to rising Chinese imports and lower supply from major South African producers.
In June alone, prices rose 28%, reaching its strongest month since 1986, reaching an 11-year high of $1,432.6 per ounce, as hedge funds and speculative traders stacked.
“Platinum has been broken from its 10-year range, and by doing so, it puts itself on the radar of professional and retail investors who think, ‘Hey, this is really fundamentally undervalued,'” says independent metal trader Tai Wong.
“However, there is a lot of volatility at the highs and the market will want to see greater demand from China.
After delivering platinum strongly to Nymex stockpiles between December and March, the metals fear that they will clash with mutual US tariffs in April.
Platinum Group metals were eventually removed from April’s tariffs, but another investigation ordered by Trump in mid-April was ordered to a potential new tariff on the imports of all important US minerals.
Meanwhile, data from South Africa, the world’s largest PGMS producer, showed a 24% decline in metal mined production in April, citing what Morgan Stanley called “exceptionally weak” production data for the first four months of 2025.
China’s platinum imports were also strong in the quarter, with 10 tons in April and 10.5 tons in May. That follows a study by industry group WPIC, which shows that China’s production of platinum jewelry increased 26% in the first quarter.
Collectively, these factors constitute “an explosive mixture for higher prices,” one trader said.
Bulls have run out of puffs
However, the explosions tend to be short-lived, and analysts question whether there is enough fundamental support to maintain a stronger gathering.
The metal focus is on seeing the global platinum market as a deficit of 529,000 ounces this year, but the resulting decline in ground stocks still leaves them at 9.2 million ounces, equivalent to 14 months of demand – a rather comfortable buffer.
Uncertainty about US trade policy regarding prolonged platinum platinum is ultimately counterintuitive to metal import duties, says Wilma Swarts, director of Metals PGMS.
Platinum lease fees, which reached 22.7% in June, have since returned to 11.6%.
Meanwhile, supply of mines in South Africa is expected to show signs of recovery in the second half, with overall global mining output falling just 6% overall this year.
“There was definitely some challenges in the rain, electricity and water disruptions in South Africa between January and March, but there were no major or ordinary ones,” said Johann Theron, a spokesman for the Impala Platinum.
Also, one trader said the strength of Chinese platinum physical demand continued until the price reached $1,050 in early June.
China’s June import data, scheduled for July 20th, is expected to show a decline after a very strong platinum delivery in the last two months.
This has waned the platinum market’s demand from the automotive sector, which uses metal as a component of catalytic converters for combustion engine vehicles, one of the most bearish factors of the past decade.
Car troubles
While the Platinum Group’s long-term pressure on metals due to the expansion of electric vehicles remains in place, the global trade dispute further weakens the medium-term outlook for the automobile sector.
Automotive production forecasters will be removed by 10 million units from their production forecasts over the next four years, and demand for PGM will decline as vehicle production decreases, Metals Focus said.
The consulting firm is forecasting demand for platinum in the automotive sector, falling 2% this year after a 3% decline last year.
Nornickel, the world’s largest producer of palladium, says further increases in platinum prices could lead catalyst producers to more alternatives to palladium metals.
It says that spreading prices between two metals over 30% will encourage it. Platinum was 22% more expensive than palladium on Thursday.
However, analysts and traders are cautious about further profits on platinum prices, but they don’t expect them to fix it.
Stonex analyst Rhona O’Connell said some of China’s April-May platinum imports could be partly a bargain hunting movement.
“China is notorious for purchasing unfavourable materials,” she said. “And while electrifying the vehicle fleet is moving forward with APACE, the internal combustion engine and diesel sector are still in place.”
Analysts are helping miners margins towards a third-year structural deficit, seeing prices that are more stable than those seen before the rally.
(Reporting by Polina Devitt and Anushree Mukherjee, Additional reporting by Felix Njini and Anastasia Lyrchikova, Editing by Veronica Brown and Jan Harvey)
