After being in the doldrums for a long time, the price of platinum has been on the rise lately due to persistent supply concerns and a sharp rise in Chinese imports. Spot platinum has soared to the highest level since May 2023 to $1,096.40 per ounce. The metal is up 20% so far this year. Renewed investor interest in the precious metals sector, especially the metal used in catalytic converters, jewellery and electronic items, added to the strength (see: all the Precious Metal ETFs here).
This has pushed platinum ETFs higher. abrdn Physical Platinum Shares ETF PPLT and GraniteShares Platinum Trust PLTM have risen 18.7% so far this year. The trio has a Zacks ETF Rank #3 (Hold).
Supply Constraints Intensify
The platinum market is grappling with a pronounced supply deficit. The World Platinum Investment Council (WPIC) projects a shortfall of 848,000 ounces in 2025, marking the third consecutive year of deficits.
Declining Mine Output: South Africa, which accounts for more than half of global platinum production, faces challenges such as aging infrastructure and operational disruptions, leading to reduced output.
Recycling Bottlenecks: Recycling rates have plummeted to a 10-year low due to fewer end-of-life vehicles and logistical challenges, further constraining supply.
Dwindling Above-Ground Stocks: To bridge the supply-demand gap, above-ground inventories are being tapped, with projections indicating a 25% decline in 2025, reducing stocks to less than four months of global demand.
Demand Remains Robust
Platinum demand remains resilient.
Automotive Sector: The slowdown in EV adoption has led to sustained demand for internal combustion engine (ICE) and hybrid vehicles, both of which utilize platinum in catalytic converters. Additionally, stricter emissions regulations, such as Europe's upcoming Euro 7 standards, are expected to increase platinum loadings in vehicles.
Jewelry Demand: High gold prices have prompted consumers and jewelers to turn to platinum as a cost-effective alternative. According to the WPIC, demand for platinum jewelry in China is beginning to rise again after declining over the past decade.
Investment Inflows: Investment demand for platinum has surged, with a 300% increase in first-quarter 2025 compared with the previous year. Reports of increasing demand for platinum bars and coins have supported the precious metal.
abrdn Physical Platinum Shares ETF (PPLT)
abrdn Physical Platinum Shares ETF seeks to match the price of platinum. It has amassed $1.1 billion in its asset base and trades in a good volume of about 195,000 shares a day. The fund charges 60 bps in annual fees (read: Platinum Prices Increase After Long Slump: More Gains for ETFs?).
GraniteShares Platinum Trust (PLTM)
GraniteShares Platinum Trust also tracks the performance of the price of platinum and is physically backed in a vault domiciled in London, United Kingdom. It has AUM of $56.8 million and charges 50 bps in annual fees. GraniteShares Platinum Trust trades in an average daily volume of 123,000 shares.
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abrdn Physical Platinum Shares ETF (PPLT): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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