Introduction
Platinum group metals (PGMs), once sidelined due to the rise of electric vehicles (EVs), are showing signs of a remarkable resurgence. According to a first-quarter 2025 market commentary by New York-based investment firm Goehring & Rozencwajg, a new bull cycle could be on the horizon for PGMs, reminiscent of the late 1990s boom that saw miners’ values soar by 30 to 60 times before the 2008 financial crisis. With platinum recently hitting a two-year peak of $1,095.50 per ounce, the stage may be set for a significant comeback.
Main Body
Demand Remains Strong Despite EV Narrative
Contrary to predictions that EVs would render PGMs obsolete, demand from ICE vehicles and hybrids continues to underpin the sector. Goehring & Rozencwajg note that catalytic converters in ICE vehicles account for 65% of global PGM demand. Research from Thunder Said Energy projects a 23% surge in demand by 2032, reaching nearly 23 million ounces annually. Hybrids, especially plug-in models, are emerging as a key driver, requiring higher PGM loadings due to less efficient catalytic converter operations.
Moreover, tightening global emissions standards—such as the EU7 in Europe, CN7 in China, and BS7 in India—are increasing PGM usage in catalytic converters. With 98% of new vehicles worldwide equipped with these converters, the demand outlook remains robust even as EV adoption faces challenges.
Supply Deficits and Market Dynamics
On the supply side, the PGM market is grappling with prolonged deficits. The World Platinum Investment Council estimates deficits of 750,000 ounces in 2023, 680,000 in 2024, and 500,000 in 2025. South African mine output has contracted by 400,000 ounces due to low production margins, with 40% of global production now uneconomic. Major players like Impala Platinum and Anglo American Platinum face compressed margins, while mine closures, such as Canada’s Lac des Iles, exacerbate the supply crunch.
New supply is limited, with South Africa’s Platreef mine not expected to contribute significantly until 2029. Above-ground inventories have also plummeted from 5 million ounces in 2022 to a projected 3 million in 2025. Additionally, recycled PGM supply has dropped by 300,000 ounces, as higher used car prices delay vehicle scrapping.
Investor Sentiment Shifting
Investor interest in PGMs, which waned due to high interest rates and bearish sentiment, shows early signs of recovery. Platinum ETFs, previously in liquidation, are now seeing accumulation, suggesting a potential shift in market confidence.
Analytical Perspective
While the bull case for PGMs is compelling, questions remain about the long-term impact of EV adoption. Could slower-than-expected EV growth sustain PGM demand beyond current projections? Additionally, geopolitical risks in key producing regions like South Africa could further tighten supply, potentially amplifying price spikes. In the context of current hot topics like energy transition and sustainability, PGMs’ role in emissions control aligns with global regulatory trends, yet their dependency on ICE and hybrid vehicles raises concerns about their relevance in a fully electrified future.