Platinum prices surged to a two-year high on Friday, propelled by a sharp rise in Chinese imports, persistent supply concerns, and renewed investor interest in the metal used in catalytic converters, jewellery and electronic items.
Spot platinum rose to its highest level since May 2023, to $1,096.40 per ounce. The metal is up 20% so far this year.
“The fundamental support stems from the prospect for a third annual supply deficit and reports of increased demand for bars, coins and jewellery in China as investors cast their eye on cheap platinum relative to expensive gold,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Traders said that the rise in the platinum price was driven by speculative buying after it broke above the major psychological level of $1,000 per ounce earlier this week.
“China was a very good physical buyer at the price of around $950/oz. The spike above $1,000 will mute this demand,” said a trader.
Customs data released this week showed China imported 10 metric tons of platinum in April, the highest level in a year and a 47% increase compared to March imports.
As gold prices soar to record highs, some investors are shifting toward platinum, which appears more affordable, analysts noted. Spot gold scaled an all-time high of $3,500.05 per ounce last month, boosted by strong investment demand, tariff war fears and central bank buying.
Demand for platinum jewellery in China has started increasing after a significant decline over the past decade, the World Platinum Investment Council (WPIC) said earlier this week.
Also supporting prices are persistent concerns about primary supply. The basket price of the platinum group metals (PGMs), chiefly used in vehicle exhausts to neutralize harmful engine emissions, has been under pressure from expansion of electric vehicles in recent years, tightening miners’ margins.
Bull cycle brewing for platinum group metals: Goehring & Rozencwajg
However, above-ground stocks of the metal remain significant – around 14 months of demand, according to consultancy Metals Focus, covering the market deficit and limiting the upside for platinum and other PGMs as demand from the auto sector keeps edging down.
Platinum’s sister metal, palladium fell back below the $1,000 mark on Friday, after hitting a six-month high of $1,042.70 on Wednesday. Its growth this week was supported by Honda’s shift towards hybrids rather than EVs, said Tai Wong, an independent metals trader.
(By Anushree Mukherjee, Polina Devitt, Sarah Qureshi and Kavya Balaraman; Editing by Emelia Sithole-Matarise)
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