THE SURGE in the platinum price over the past month to above $1,385/oz may be followed by a short-term correction, but it is expected to continue appreciating in the remainder of 2025 and 2026, according to economic think-tank Afriforesight.
This is good news for SA, which produces about 70% of global platinum. The trough in the platinum price to below $1,000/oz in 2023 and 2024 has resulted in cost-cutting, job losses and the closure of marginal production.
The latest price improvement could be a response to the World Platinum Council’s forecast on 19 May of a 966,000oz platinum deficit this year, the weaker dollar, stronger jewellery demand and plans by global automakers such as Toyota and Isuzu to increase output of hybrid electric vehicles (HEVs), Afriforesight Chief Economist Nathan Musson said.
Afriforesight has downgraded its forecast for global growth below 2% this year as US protectionism is weighing on investment sentiment and squeezing exporting countries like China. Higher growth is forecast in 2026 and 2027, but still below trend.
Musson said 40-50% of the year-to-date rise in gold and silver prices and 20-25% of the rise in platinum prices was attributable to dollar weakness. However, platinum was surging ahead of other metals, showing other factors at play: its attractiveness as a safe haven, jewellery demand, and a more positive outlook for demand from the automotive sector. Despite geopolitical upheavals, global supply chain pressures were easing and car sales were trending upwards.
Afriforesight’s Head of Research, Vinesh Chetty, said petrol cars still accounted for 70% of car sales in 2024, while 20% were battery electric vehicles (BEVs). Plugin hybrids, which have both batteries and petrol engines, are becoming increasingly popular among consumers and in May 40% of Toyota’s global sales were of hybrids. BEV sales fell in the first quarter of this year as subsidies are tapering off and President Donald Trump’s One Big Beautiful Bill provides for an end to EV subsidies.
Hybrids use more PGMs, specifically platinum and rhodium, in their autocatalysts than petrol engines. This is pushing demand for PGMs up, together with more stringent emission standards, requiring greater PGM loading in autocatalysts. Also, hydrogen vehicles, which use platinum as a catalyst, are becoming more popular for commercial use because they do not require lengthy charging and provide greater power for towing than BEVs.
Kirthi Ramdhanee, Afriforesight’s Head of PGMs and Sustainability, said although platinum and rhodium demand will rise on higher hybrid sales this year, palladium demand from the automotive sector will decline. In the short term, platinum miners will not be able to increase production in response to demand but she anticipates an increase in output in response to higher prices in 2026. Palladium production from Russia is expected to rise, which will weigh on the palladium price.
Asked about the five-year outlook on prices, Ramdhanee said the platinum price was likely to be volatile but trend upwards, underpinned by sales of petrol cars and hybrids and a recovery in industrial demand in line with global growth. The rhodium price would follow similar trends but the palladium price would decline as a result of substitution, anti-Russian sentiment and its lower offtake for industrial uses.
