Platinum prices surged in Q2 but analysts warn of limited upside due to bearish factors

Platinum prices surged 36% in Q2 due to rise in Chinese imports and drop in South African supply. Prices hit 11-year high of $1,432.6/ounce in June. Analysts warn of limited room for further rise due to muted auto sector demand. China’s platinum imports strong, but market faces bearish factors like waning auto sector demand.

Tight near-term availability led to spike in platinum lease rates, forcing industrial users to buy. South Africa’s PGM output fell 24% in April, contributing to an “exceptionally weak” production data for first four months of 2025. Analysts question underlying support for platinum rally, despite global market deficit of 529,000 ounces.

Platinum lease rates peaked at 22.7% in June, falling to 11.6% since. South Africa’s mine supply expected to recover in second half, with global output down just 6% for the year. China’s strong platinum demand waned above $1,050, leaving market vulnerable to auto sector demand drop. Analysts expect stable prices above pre-rally levels.

Long-term pressure from electric vehicles and trade disputes dampen auto sector outlook for PGM demand. Forecasters reduce production projections by 10 million units over next four years, leading to weaker PGM demand. Nornickel warns of potential palladium substitution for platinum if price spreads exceed 30%. Analysts cautious but not expecting platinum price correction.

Read more at Yahoo Finance: Analysis-Platinum prices have limited upside after June’s stellar rally