⚪ Platinum
Platinum is the versatile PGM — a platinum group metal with diverse demand across diesel vehicles, jewelry, industrial applications, and an emerging role in hydrogen fuel cells. Unlike palladium (gasoline-only), platinum’s demand mix gives it multiple narratives and potential upside from the clean energy transition.
What makes platinum special?
Platinum has traded at a discount to palladium since 2017 — a historical anomaly. For decades, platinum was the “noble” metal, commanding premiums over both gold and palladium. Understanding why that changed, and whether it reverses, is key to trading platinum.
The Demand Mix: Diversification is Strength
Platinum’s demand is spread across multiple sectors:
| Use | % of Demand | What It Does |
|---|---|---|
| Autocatalysts | ~35-40% | Converts diesel exhaust emissions (NOx, particulates) |
| Jewelry | ~25-30% | Platinum rings, watches, luxury goods (especially China, Japan) |
| Industrial | ~20-25% | Glass manufacturing, petroleum refining, chemicals |
| Investment | ~5-10% | Bars, coins, ETFs |
| Hydrogen/Fuel Cells | ~2-3% | Catalyst in PEM fuel cells (growing) |
This diversification is platinum’s structural advantage over palladium:
- Diesel decline hurts, but it’s only 35-40% of demand (vs. palladium’s 80% auto exposure)
- Jewelry provides counter-cyclical support
- Hydrogen fuel cells offer long-term growth optionality
Supply: Same Concentration, Different Mix
Like palladium, platinum supply is concentrated — but the country mix differs:
| Source | % of Supply | Notes |
|---|---|---|
| South Africa | ~70% | Dominant producer — Bushveld Complex |
| Russia | ~10-12% | Nornickel byproduct |
| Zimbabwe | ~8% | Growing producer |
| North America | ~5% | Stillwater, Canadian operations |
| Recycling | ~25% | Spent autocatalysts, jewelry |
South Africa’s dominance creates different risks than palladium’s Russia exposure:
- Power grid issues: Eskom load-shedding disrupts mining operations
- Labor disputes: South African mining strikes are common
- Currency effects: Rand weakness can support margins, strength pressures them
The Diesel Decline (Priced In?)
Platinum’s autocatalyst demand took a structural hit when:
- Dieselgate (2015): VW scandal crushed diesel car demand in Europe
- Diesel bans: European cities began restricting diesel vehicles
- Gasoline shift: Consumers moved to gasoline (palladium) and EVs
But here’s the nuance: diesel decline may be largely priced in. Platinum fell from $1,800+ (2011) to sub-$900 (2020). The question is whether:
- Diesel decline continues (bearish)
- Substitution for palladium accelerates (bullish)
- Hydrogen fuel cells scale (very bullish long-term)
The Hydrogen Optionality
This is platinum’s asymmetric upside:
Current fuel cell demand is small (~2-3% of total), but:
- Heavy trucks, buses, and trains favor hydrogen over batteries (weight/range)
- Industrial hydrogen (green steel, ammonia) requires electrolyzers
- Government hydrogen strategies (EU, Japan, Korea) are accelerating
For traders: hydrogen is a call option embedded in platinum. It may never pay off, but if it does, the upside is substantial.
Which ETFs should I watch?
Physical Platinum ETFs
| ETF | Name | Expense Ratio | AUM | Key Feature |
|---|---|---|---|---|
| PPLT | abrdn Physical Platinum Shares | 0.60% | ~$1B | Primary US-listed platinum ETF |
| SPPP | iShares Physical Platinum ETC | 0.45% | ~$200M | London-listed, physically backed |
PPLT is the main instrument for US traders. Liquidity is better than PALL but still thin compared to gold/silver ETFs.
Related Context
| ETF | Name | What It Tracks | Role in Analysis |
|---|---|---|---|
| PALL | abrdn Physical Palladium Shares | Physical palladium | Sister PGM, substitution dynamics |
| GLTR | abrdn Precious Metals Basket | Gold, silver, platinum, palladium | Broad precious metals exposure |
| GLD | SPDR Gold Shares | Physical gold | Precious metals benchmark |
For the palladium relationship and detailed PALL/PPLT ratio analysis, see the Palladium page.
How does platinum relate to other metals?
The PPLT/PALL Relationship (Critical Ratio)
Platinum and palladium are substitutes in autocatalyst applications. The ratio tells you about relative value and substitution pressure:
- PPLT/PALL rising: Platinum gaining on palladium — substitution occurring, or diesel stabilizing
- PPLT/PALL falling: Palladium premium expanding — gasoline vehicles still dominant, no substitution
Historical context: Platinum traded at a premium to palladium for decades. The ratio inverted in 2017 as:
- Diesel demand collapsed (platinum negative)
- Gasoline vehicle palladium loading increased (palladium positive)
- Russian supply concerns spiked palladium
Mean reversion would require substitution to accelerate or hydrogen to scale.
PPLT/GLD — Platinum vs. Gold
- Rising: Platinum outperforming — industrial/auto strength or undervaluation correction
- Falling: Gold preferred — risk-off or platinum-specific headwinds
Historically, platinum traded at a premium to gold. The current discount (~$1,000 platinum vs. ~$2,600 gold) is extreme by historical standards.
PPLT/SPY — Platinum vs. Market
- Rising: Platinum outperforming equities — industrial demand or supply squeeze
- Falling: Risk-on without platinum — demand concerns or oversupply
What moves first in a platinum cycle?
Substitution Rally
When platinum rallies on palladium substitution:
Palladium premium becomes extreme
PALL/PPLT ratio hits extremes (2:1, 3:1). Automakers announce substitution programs.
PPLT starts outperforming
Platinum catches a bid as substitution thesis gains traction.
PPLT/PALL ratio compresses
Mean reversion begins. Platinum closes the gap.
Auto production data confirms
Actual palladium demand declines as platinum substitution scales.
Hydrogen Catalyst Rally
When platinum rallies on hydrogen/fuel cell news:
Policy or corporate announcement
Government hydrogen strategy, major fuel cell vehicle launch, or green hydrogen project.
PPLT spikes on news
Thin liquidity means fast moves on hydrogen headlines.
Jewelry/auto demand provides floor
Unlike pure speculation, platinum has real demand support.
Watch for follow-through
Hydrogen rallies often fade without sustained news flow.
Supply Disruption Rally
When platinum rallies on South African supply issues:
Eskom or labor news breaks
Power outages, mine strikes, or safety shutdowns in South Africa.
PPLT and PALL both spike
Both PGMs affected, but platinum more (70% South African supply).
Rand moves inversely
Weak rand = mining margin support; strong rand = cost pressure.
Mean reversion as supply normalizes
Supply disruptions are usually temporary.
Which relative charts should I monitor?
Essential Ratios
PPLT/PALL — Platinum vs. Palladium
The key ratio for PGM relative value:
- Rising: Platinum gaining — substitution, diesel stabilization, or hydrogen news
- Falling: Palladium premium expanding — gasoline dominance continues
PPLT/GLD — Platinum vs. Gold
- Rising: Platinum outperforming — industrial strength or undervaluation thesis
- Falling: Gold preferred — risk-off, platinum headwinds
PPLT/SPY — Platinum vs. Market
- Rising: Platinum outperforming equities
- Falling: Risk-on without platinum participation
Reading the Dashboard
| Condition | Interpretation |
|---|---|
| PPLT/PALL rising, PPLT/GLD rising | Platinum bull — substitution + undervaluation thesis working |
| PPLT/PALL rising, PPLT/GLD falling | Substitution only — platinum gaining on palladium but not gold |
| PPLT/PALL stable, PPLT/SPY falling | No catalyst — platinum underperforming with market |
| PPLT spiking, South Africa news | Supply disruption — trade tactically |
How do I know where we are in the cycle?
What you’ll see:
- Platinum trading at massive discount to palladium and gold
- Diesel decline fully priced, no new negatives
- Hydrogen news trickling but not moving prices
- Low investor positioning, minimal ETF flows
- South African production stable
What it means: Deep value, but needs a catalyst. Position small, add on confirmation.
What you’ll see:
- Automaker substitution announcements
- OR major hydrogen policy/project news
- PPLT/PALL ratio starting to compress
- ETF inflows picking up
- Analyst upgrades appearing
What it means: The thesis is getting attention. Add on confirmation, set stops.
What you’ll see:
- PPLT/PALL ratio compressing toward 1:1
- PPLT/GLD rising (platinum gaining on gold)
- Media coverage of “platinum undervaluation” narrative
- Strong ETF inflows
- Jewelry demand responding to still-attractive prices
What it means: Thesis working. Trail stops, watch for crowding.
How do I put this all together?
Daily Checklist
- Check PPLT/PALL ratio — Is substitution trade gaining traction?
- Check South Africa news — Eskom, labor, or production issues?
- Check hydrogen news — Policy announcements, fuel cell launches?
- Check PPLT/GLD — Is platinum gaining on gold?
- Check auto production data — Diesel vs. gasoline vs. EV mix trends
Entry Conditions (Undervaluation Thesis)
- PPLT/PALL at extreme discount (0.4:1 or lower)
- PPLT/GLD at multi-decade lows
- Substitution announcements from automakers
- Hydrogen policy catalysts emerging
- South African supply stable
Exit Conditions
- PPLT/PALL approaching 1:1 (mean reversion complete)
- Hydrogen thesis fading without follow-through
- Diesel demand declining faster than substitution gains
- South African supply surge
- Crowded positioning, media coverage of “platinum comeback”
Quick reference
| Phase | What to Watch | What’s Happening |
|---|---|---|
Undervalued | Extreme PPLT/PALL discount, no catalyst | Deep value, needs trigger |
Catalyst | Substitution or hydrogen news | Thesis gaining traction |
Revaluation | Ratios compressing, ETF inflows | Mean reversion working |
Related themes
Platinum connects to precious metals, auto production, and the hydrogen economy:
Sources
Learn more about the contents of this page by reviewing these sources:
Supply & demand fundamentals
Demand breakdown: Johnson Matthey, “PGM Market Report” (annual). Autocatalysts ~35-40%, jewelry ~25-30%, industrial ~20-25%.
Supply concentration: USGS Mineral Commodity Summaries 2025, “Platinum-Group Metals”. South Africa provides ~70% of primary production.
Recycling: World Platinum Investment Council. Recycling provides ~25% of total supply.
Hydrogen and fuel cells
Fuel cell demand: World Platinum Investment Council, “Platinum Essentials”. Fuel cell demand growing but still small percentage of total.
Hydrogen strategies: IEA, “Global Hydrogen Review”. Government policies supporting hydrogen infrastructure.
PEM electrolyzers: Platinum and iridium are key catalysts for proton exchange membrane electrolyzers used in green hydrogen production.
Substitution dynamics
Palladium substitution: BASF, Johnson Matthey catalyst research. Automakers can substitute platinum for palladium in gasoline catalysts when price differential is extreme.
Historical ratio: Platinum traded at premium to palladium until 2017. Current discount is historically anomalous.
ETF information
Industry data
Johnson Matthey: PGM Market Report — annual supply/demand analysis for all PGMs.
World Platinum Investment Council: platinuminvestment.com — platinum-specific market data and investment research.
USGS: Mineral Commodity Summaries — annual production and reserve data.