A platinum bull market could finally be under way, here’s what it could mean for investors

Platinum has been in a 16-year bear market. Meanwhile Palladium has collapsed roughly 70% in just four years. Sentiment for both metals is down the drain. Many investors have written them off, convinced these metals will become obsolete. But what if they’re wrong?

Well, over the past 18 months, a growing number of supply and demand signals have begun to flash, suggesting that the long-overlooked PGM market may be on the cusp of a REBOUND.

In fact, over the past month alone, platinum has begun to reflect these dynamics – surging over 10% – pushing its 2025 return to +21%.

Could this be the start of a much bigger move?

Let’s take a look…

Why have PGMs received the cold shoulder from investors?

The mainstream narrative that’s often repeated holds that electric vehicles (EVs) will permanently erode demand for PGMs (platinum, palladium and rhodium). After all. roughly 65% of global platinum, palladium, and rhodium production flows into automotive catalytic converters.

Yet the predicted “EV takeover” is unravelling. Recent disappointments in global EV sales have forced analyst’s and researchers to taper aggressive EV adoption forecasts. Moreover, they’re even now beginning to consider a scenario where internal combustion engine (ICE) vehicles maintain measurable growth well into the 2030s.

That, of course, is bullish for PGMs.

Consider this example from a recent report from commodity research firm Goehring & Rozencwajg:

Consider the numbers: global ICE vehicle sales peaked in the late 2010s at 95 million units, fell as low as 75 million during the pandemic years, and have since rebounded to an annualised rate nearing 90 million.

Even granting the assumption – borrowed from the excellent work of Rob West at Thunder Said Energy – that EV sales grow from 14 million units in 2023 (a 15% market share) to 40 million by 2030 (30% share), total ICE vehicle sales could still hold steady near 90 million through at least 2033.

That’s a conservative case. Should EV adoption stumble further, the upside for PGM demand is even greater.

Don’t ignore the rise of the hybrid…

Analysis from Goehring & Rozencwajg suggest hybrids offer superior energy efficiency to both EVs and traditional ICE vehicles. If correct, this advantage could drive widespread adoption, boosting demand for PGMs.

Why?

Simply, because hybrids require more PGMs than ICEs,

As Goehring & Rozencwajg explain:

Catalytic converters operate best at high temperatures. In a traditional ICE vehicle, the engine runs continuously, allowing the converter to reach and maintain those optimal temperatures.

In a hybrid, the engine cycles on and off, which causes the catalytic converter to run cooler and less efficiently. To compensate, automakers must increase the loading of PGMs – sometimes by as much as a full additional gram per vehicle.

As hybrids gain share at the expense of both EVs and ICEs, PGMs become an important source of future demand.

The surge in PGMs demand driven by hybrids is only part of the story…

Another, equally important driver is gathering momentum: the steady tightening of global vehicle emissions standards.

Today, 98% of all new vehicles sold worldwide are equipped with catalytic converters. The average PGM loading per converter is currently estimated at 5 grams. Goehring & Rozencwajg predict this figure will move higher soon.

At its core, the physics is simple: the more PGMs a catalytic converter contains, the better it performs. Higher loadings yield more complete conversion of unburned hydrocarbons, carbon monoxide, and nitrogen oxides into less harmful byproducts like carbon dioxide and water vapor. And as emission standards become progressively more stringent, so too must the efficacy of the converters.

This trend is already playing out.

In Europe and Japan, catalytic converters now contain between 7 and 9 grams of PGMs. In the US, it’s closer to 5 grams. And China and much of the developing world use roughly 3 to 4 grams.

But that is about to change. Europe and China are set to implement new emissions regulations between now and 2030. Meanwhile, India is following a similar path – with the “Bharat Stage 7 (BS7) emission standard” scheduled to take effect in July 2025.

Simply put – these new regulations require more platinum to help reduce emissions.

Supply-demand trends have turned extremely positive

The market is underestimating the likely trajectory of PGMs demand between now and the early years of the next decade.

Both the platinum and palladium markets have now swung into deficit – those deficits look like they’re only going to get worse due to:

1) Reduced production in South Africa
2) Reduced recycled supply

In 2023, platinum recorded a 750,000-ounce shortfall…

In 2024, that figure stood at 680,000 ounces.

And in 2025, platinum will record a third consecutive year of undersupply – over 500,000 ounces, according to the World Platinum Investment Council.

The thing is that large deficits over the past two years have meaningfully eroded above-ground inventories.

After peaking near 5 million ounces in 2022, above-ground platinum stocks have declined by approximately 1.5 million ounces. Estimates suggest it could further decline to 2-2.5 million ounces. That’s only enough to cover three months of global platinum demand.

So, what we have today is robust demand. Contracting supply. Persistent deficits. And an investment consensus that believe a PGM collapse will happen soon.

These are the perfect conditions to ignite a PGM bull market, and bold investors could be handsomely rewarded. Follow South African Investor for opportunities as this plays out.