Sprott is a Toronto-headquartered asset manager specializing in precious metals and critical materials (NYSE/TSX: SII), tracing its roots to Sprott Securities founded by Eric Sprott in 1981 and now led by CEO Whitney George. It runs physical gold, silver and uranium trusts, ETFs, active strategies and resource lending, with about $65bn in AUM. The Insights column carries monthly commentaries and white papers on uranium, gold, silver, copper and critical materials by Paul Wong, Jacob White and John Hathaway (ex-Tocqueville gold manager) — note the house's structurally bullish commodity stance, as it sells the corresponding trusts and ETFs.
Platinum is rarer than gold, but its price has been stuck for years. New reports show global platinum supply has fallen short of demand for three straight years, and stockpiles could run out within three years. Since opening new mines takes over a decade, any price spike won't quickly fix the shortage—meaning prices could rise sharply. Investors might consider platinum or mining stocks, but watch for volatility from trade policies. It's worth reading because platinum's fundamentals are finally shifting.
The platinum market is facing its third consecutive year of structural supply deficit, with the 2025 shortfall projected at 966,000 ounces, representing 12% of global demand. According to WPIC data, the deficit stood at 992,000 ounces in 2024 and 896,000 ounces in 2023. If the deficit persists, abov
This chapter focuses on the platinum market facing a third consecutive year of structural supply deficit, with the shortfall reaching 12% of global demand, and above-ground inventories potentially being exhausted within three years. The report argues that against a backdrop of severely constrained supply and broad-based demand growth, platinum prices may be approaching a critical inflection point.
The author's core investment thesis is that the platinum market is confronting an unsustainable structural deficit, where the rapid depletion of inventories and the imbalance between demand and supply will force a significant price revaluation. The counterintuitive judgment lies in the fact that despite platinum's prolonged price weakness (underperforming gold significantly over the past decade), the supply side is extremely slow to respond to price increases (new mines require over a decade to come online). Therefore, even a price surge cannot alleviate the shortage in the short term.
1. Structural Deficit Continues to Deepen
2. Severely Constrained Supply
3. Broad-Based Demand Growth
| Demand Category | 2025 Forecast | Key Drivers |
|---|---|---|
| Automotive Demand | 3.245 million ounces (8-year high, +2% YoY) | Slowing EV adoption; each 1% decline in BEV market share adds 25,000 ounces of PGM demand |
| Jewelry Demand | +5% in 2024, +2% in 2025 | China Q1 demand surged 300% YoY; strong manufacturing in India |
| Industrial Demand | 2.216 million ounces (-9% YoY, still above 10-year average) | Demand from green technologies such as hydrogen fuel cells and chemical manufacturing |
| Investment Demand | 688,000 ounces (third consecutive year of net positive investment) | Surge in Chinese bar and coin demand; speculative net long positions doubled |
This chapter focuses on the current state of platinum prices being persistently undervalued and analyzes the catalysts that may trigger a revaluation. The report points out that against the backdrop of widespread inflation, platinum is one of the few assets whose price remains similar to that of 20 years ago, while production costs have risen significantly, and supply-demand fundamentals are undergoing a fundamental shift.
The author’s core judgment is that the platinum market is approaching a "tipping point," where structural supply deficits, inventory depletion, and resilient demand will jointly trigger a substantial price revaluation. A counterintuitive argument is that, despite being bullish on platinum, the author explicitly expects the market to remain highly volatile in 2025 due to US tariffs and trade policy fluctuations, rather than experiencing a one-sided rally.
1. Historical Price Reference: Palladium surged from below $600/oz to over $3,100/oz between 2016 and 2021. The author believes that while platinum may not replicate the same magnitude of gains, its price has recently rebounded significantly from lows—reaching $1,100/oz in May 2025—indicating optimism and momentum.
2. Cost-Inflation Divergence: Platinum’s current price is similar to that of 20 years ago, but mining costs have risen substantially, and bringing new mines online faces enormous challenges, constituting a long-term supply constraint.
3. Inventory and Supply-Demand Contradiction: Above-ground inventories are near historical lows, with structural deficits persistently depleting stocks. Constrained supply (declining South African mine output) combined with steady demand growth (from automotive, jewelry, and industrial sectors) creates a "perfect storm."
Price Comparison Data (2006-2025):
| Asset | Price Range (USD/oz) | Key Characteristics |
|---|---|---|
| Platinum | ~1,100 (May 2025) | Price flat compared to 20 years ago, recent rebound from lows |
| Palladium | 600→3,100 (2016-2021) | Historic surge, serving as a reference for platinum revaluation |
| Gold | Not specified | Used as a benchmark, platinum is severely undervalued relative to gold |