Core Viewpoint - Platinum prices have surged significantly in 2023, reaching a nearly five-year high, with a year-to-date increase of over 40%, surpassing gold's performance [1][2]. Supply and Demand Analysis - The primary reason for platinum's price increase is a supply-demand imbalance, particularly due to production declines in South Africa caused by power shortages and frequent strikes [2][3]. - Global primary platinum production is highly concentrated, with South Africa, Zimbabwe, Russia, and the USA accounting for 96% of total output [3]. - In 2025, total platinum supply is expected to decrease by 6.38% to 386.9 million ounces, while demand is projected to grow by 10.8%, leading to a supply-demand gap of 41.2 tons [4]. Market Trends - The first quarter of 2025 saw a significant supply shortfall of 25 tons, marking the largest quarterly deficit in six years [6]. - Investment demand for platinum is anticipated to rise by 30% to 8 tons, driven by recovery in the Chinese and North American markets [6]. - The jewelry sector is expected to see a 5% increase in demand, with Chinese market demand projected to grow by 15% to 15 tons [6]. Price Dynamics - As of June 24, 2023, platinum's spot price was around $1,286 per ounce, reflecting a year-to-date increase exceeding 40% [5]. - UBS has noted that platinum's price increase has surpassed their previous forecasts, indicating a potential for further price appreciation [5]. - Goldman Sachs has cautioned that the current price surge may not be sustainable, attributing it to speculative demand rather than fundamental improvements [7].