Platinum's Comeback: A Smart Investment Choice as Geopolitical Strains Intensify and Industrial Needs Rise

The platinum sector is facing a crucial

The Autocatalyst Revival: Platinum's Vital Role Remains

Platinum’s importance in catalytic converters remains significant. Although EVs are making headlines, ICE and hybrid vehicles still represent more than 70% of worldwide car output. Tighter emissions regulations, especially in Europe and China, have pushed automakers to increase platinum use in their catalytic converters. Hybrids, which frequently switch engines on and off, demand even greater platinum content for optimal performance.

The trend of swapping platinum for palladium has gained pace, spurred by palladium’s supply concerns (with 40% sourced from Russia) and its premium pricing. In 2023, 540,000 ounces of palladium were replaced by platinum, and that number rose to 720,000 ounces in 2024. By the second quarter of 2025, platinum demand for autocatalysts climbed 12% year-over-year, reaching 3,246 kiloz, with U.S. prices at $1,380/oz and German prices at $1,467/oz.

South Africa’s Stealth Crisis: An Unstable Supply Chain

Producing 70% of the world’s platinum, South Africa faces mounting challenges. Its mining industry has sharply declined: operational shafts dropped from 81 in 2008 to only 53 in 2025. Outdated infrastructure, difficult mining conditions, and labor disputes have all hit production hard. In April 2025, platinum output from South Africa was down 24% from the previous year, intensifying a global shortfall of 966,000 ounces.

Investment in the sector has lagged badly. Capital spending hasn’t matched the rise in costs, especially for energy and labor. Frequent power failures from Eskom push mines to depend on expensive diesel generators, while strikes and poor labor relations further hurt productivity. Even though recycling rates are better than those for palladium, they still can’t make up for the decline in mined platinum.

Geopolitics and the Palladium Price Gap: Opportunities and Risks

Geopolitical issues linked to platinum are often underestimated. Political turmoil in South Africa—from corruption to unpredictable policy changes—adds instability. At the same time, with 40% of palladium coming from Russia, sanctions and export controls add risk. This scenario—platinum’s dependence on an unstable region and palladium’s vulnerability to Russian politics—makes platinum an attractive hedge in a world concerned about supply chain security.

The price gap with palladium also supports platinum. By July 2025, platinum was trading 22% higher than palladium, nearing the historical 30% threshold that prompts more substitution. Still, automakers are now committed to platinum-heavy platforms, and any shift back takes about seven years, creating lasting demand for platinum even as EVs gain ground.

Investment Outlook: Seizing the Upswing

Platinum’s price rally of 36% in Q2 2025 signals growing investor awareness, but the metal remains undervalued considering the supply-demand gap. According to the World Platinum Investment Council (WPIC), a yearly deficit of 727,000 ounces is expected through 2029, with recycling unable to close the shortfall.

Those looking to invest might consider platinum ETFs (like PPLT) or mining companies such as Northam Platinum (NPT) and Impala Platinum (IMP). These benefit from both the immediate demand boost and the longer-term prospects in hydrogen fuel cells, where platinum’s unique catalytic role cannot be replaced.

Balancing Gains and Risks: A Strategic Perspective

The short-term forecast for platinum is positive, but there are risks. A quick shift to EVs could weaken autocatalyst demand, and if global tensions relax, the palladium price premium might shrink. However, tight supply from South Africa and growing use of platinum in green hydrogen and healthcare industries offer strong support.

For those aiming for gains over the next 12 to 18 months, platinum presents an appealing risk-reward profile: strong upside potential with limited downside, thanks to its irreplaceable industrial function and overlooked supply issues.

With ESG (Environmental, Social, Governance) investing on the rise, platinum’s sustainability advantages—higher recycling rates and a broader supply network—make it a smart addition to portfolios. The market is finally recognizing that platinum isn’t just a remnant of the combustion engine era, but a crucial part of the green energy movement.

Actionable Insight: For investors seeking exposure to a metal with a clear supply squeeze and favorable geopolitical factors, platinum stands out as a buy. This is the moment to act—before the market fully factors in South Africa’s deepening crisis and the ongoing strength in autocatalyst usage.