China’s Platinum Import Surge Signals Tighter Market Amid Gold Volatility

In April 2025, China imported 11.5 tons of platinum, the highest in a year, as jewelers and investors sought alternatives to gold, which hit $3,238.10 per ounce with 0.14% daily gains.

The Shenzhen Shuibei market, a hub with over 10,000 retailers, has seen platinum vendors triple in a month, according to Yang Yang, a deputy general manager at a major market player.

This shift stems from a slump in gold jewelry sales since 2024, driven by gold’s high prices and volatility. Platinum’s relative stability, coupled with its use in catalytic converters for diesel vehicles, has boosted its appeal.

However, the transition poses challenges, as platinum requires distinct craftsmanship, leading to doubled wait times for retailers.

Real-time sentiment suggests Chinese consumers, particularly Gen Z, are favoring platinum for its durability and luxury in wedding jewelry.

ALSO READ | Gold Prices Recover from Daily Lows as USD Weakens, but Risk-On Sentiment Caps Gains.

Tightening Global Platinum Supply

The surge in Chinese demand is exacerbating an already strained global platinum market. The WPIC reports a 2024 deficit of nearly 1 million ounces, with a projected 966,000-ounce shortfall in 2025 due to a 4% decline in total supply to 6.999 million ounces.

Above-ground stocks fell 23% in 2024 and are expected to drop another 25% to 2.535 million ounces in 2025, equivalent to less than four months of demand.

South Africa, which accounts for over 90% of global platinum reserves, faces production challenges from labor strikes and electricity shortages, while the recycling supply remains weak.

China’s first-quarter bar and coin demand more than doubled, making it the largest market for platinum retail investment, surpassing North America. This tightening supply, combined with speculative buying, has driven platinum’s 10% price rally this year.

Did You Know?
Platinum is 30 times rarer than gold, requiring 10 tons of ore to yield just one ounce, making it one of the most challenging precious metals to mine.

Automotive and Jewelry Sectors Drive Demand

Platinum’s role in catalytic converters, which reduce vehicle emissions, remains a key demand driver, accounting for roughly 40% of global usage.

Despite the rise of electric vehicles (EVs), slowing EV adoption, partly due to US policy shifts and infrastructure challenges, has sustained demand for internal combustion engine vehicles, which require platinum-heavy catalytic converters.

The WPIC forecasts automotive demand at 3.102 million ounces in 2025, slightly down from 3.130 million ounces in 2024 but still robust.

Jewelry demand, particularly in China and India, is projected to rise 5% to 1.98 million ounces in 2025, driven by cultural preferences for platinum’s durability in ceremonial jewelry.

Stricter global emission standards, such as Euro 6 in Europe and Bharat Stage VI in India, further bolster platinum’s automotive demand.

Market Outlook and Risks

The platinum market is expected to remain tight through June and July 2025, with analysts like Nikos Kavalis of Metals Focus noting speculative buying as inventories hit historic lows.

However, risks loom, including potential US tariffs on critical minerals, as announced by President Donald Trump, which could disrupt supply chains, particularly from Mexico and Canada, which supply 45% and 10% of US auto parts, respectively.

Trade tensions, including China’s accusations of US violations of a recent tariff truce over Huawei’s AI chips, add uncertainty.

Despite these challenges, platinum’s relative affordability compared to gold ($3,238.10 per ounce) and its critical industrial applications suggest sustained demand.

Investors are closely monitoring the annual Platinum Week gathering in London, starting May 20, for further market insights.