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Informist, Thursday, Jul. 31, 2025

MUMBAI – Notwithstanding a significant supply of the metal, the platinum market remains tight, with elevated lease rates, strong backwardation in the London OTC market, and a returning premium on platinum sponge, according to the World Platinum Investment Council. The tightness is likely to continue through the next quarter as the re-emergence of US tariff fears has reversed exchange stock outflows while robust platinum imports to China continue, the council said.

Lease rates started climbing in December, with steepening contango in the US in response to tariff risk fears driving an accumulation of exchange stocks. However, fears of tariffs on platinum had eased after US President Donald Trump's 'Liberation Day' in April came without the metal being directly tariffed. This, along with an over 50% year-to-date increase in platinum prices, resulted in almost 355,000 ounces coming out of exchange-traded funds and exchange stocks since the start of the second quarter of 2025 (Apr-Jun), it said.

However, the injection of the precious metal did little to return lease rates to their 1-3% 2024 trading range, as much of this supply went to China to meet strong fabrication demand for platinum investment and jewellery products, the council said. "Moreover, Q1 2025 saw particularly weak levels of mine supply from South Africa due to unprecedented flooding," the council said. This culminated in sustained lease rates at 5-10% in the first five months of 2025, it said.  

Typically, higher lease rates should discourage borrowing of the metal and incentivise the outright purchase, thus supporting higher prices, the council said. In June, platinum prices materially accelerated. However, lease rates remained high, and with the announcement of US tariffs on copper imports, fears of tariffs re-emerged for platinum. NYMEX stocks reversed their unwinding trend and increased by 201,000 ounces in July.

Platinum markets are expected to stay tight through the next quarter despite the potential for further exchange-trade fund outflows. In China, elevated gold price continues to support platinum's relative value proposition in both the jewellery and investment segment. The council anticipates a recovery in South African mine supply during the fourth quarter, following scheduled maintenance activities in the third quarter.  End

Reported by Shreya Shetty

Edited by Subhojit Sarkar

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