PGMs Industry Day 2025 future outlook
Tue May 27 2025
There was consensus among participants at the PGMs Industry Day organised by Resources 4 Africa on 3 April 2025. The expected growth in platinum uptake has not been realised, mainly due to the much slower transition and demand of Battery Electric Vehicles (BEV) and the lag in the development of hydrogen as a fuel source.
Short-term volatility was noted as the reason for the significant turbulence in PGM prices due to factors like fragile global economic recovery and geopolitical tensions, including potential tariffs and tariff adjustments. Session chair, Bernard Swanepoel, joked that there was too much focus on the tariffs on the Liberation Day announcement by the United States of America the day prior to the conference and that there was a degree of Trump Derangement Syndrome, while the negative effect China has had for a prolonged period was being disregarded.
Despite the immediate challenges, there was cautious optimism for a long-term recovery in PGM prices. Panellists expressed the belief that underlying fundamentals, such as potential supply deficits, will eventually support prices. The automotive sector remains a crucial demand driver for platinum, primarily in catalytic converters for reducing emissions in vehicles with internal combustion engines (ICEs) and hybrid electric vehicles (HEVs). This is viewed as a saving grace in the current economic conditions for platinum producers. While the rise of battery electric vehicles (BEVs) poses a long-term threat to platinum demand in auto-catalysts, the pace of adoption might be slower than initially anticipated, sustaining demand for platinum in the medium term. The main reason for the notable slowdown in the BEV market, is that the incentives and subsidies previously offered in China and the EU, for BEVs have fallen away.
Stricter emissions legislation and the increasing adoption of HEVs are also expected to support platinum demand. Mention was made of the recent Dieselgate 2.0 following the news that there was manipulation of emission test data from China. Substitution of palladium with platinum in petrol auto-catalysts due to price differences could further boost platinum demand.
Supply dynamics remain very uncertain and hard to predict. Concerns for primary supply exist due to lower investment in new and existing mining assets. It was also noted that secondary supply (recycling) has been underperforming and not meeting expectations. The market analysts suggested that the market is expected to see continued structural supply deficits in platinum for the foreseeable future. The current turbulent times, specifically geopolitical instability in major producing regions like South Africa and Russia, were repeatedly noted as a factor that could impact global supply.
The potential of more investment demand is expected to remain elevated in 2025, driven by factors like rising gold prices and tariff-related fears causing inflows into exchange-traded funds and exchange stocks. In addition, industrial demand remains diverse, including applications in glass manufacturing, chemicals and electronics. While some sectors like glass manufacturing might see a decline in platinum demand, others like the chemical, petroleum and medical sectors are expected to see growth.
Big expectations were placed on the Hydrogen Economy, where fuel cell technology, which uses platinum as a catalyst, presents a significant potential growth area for platinum demand in the long term, although the timeline for widespread adoption remains uncertain and is lagging far behind projections. In contrast, jewellery demand is expected to see modest growth, particularly in regions like China and India.
Dmitry Izotov, CEO of Palladium Center, Nornickel introduced the audience to the company and their bold plans for palladium. The new centre, constructed in Moscow, Russian Federation, aims to have in excess of120 patents/products by 2030. Their model aims to have a shorter turn-around time from concept to development within 6 to 9 months per product. The eventual aim is to uplift palladium demand by 1.7-million ounces a year.
At the time of the Platinum Day, the previous 3 months had seen palladium pricing rise about 25% , but notably lower than the USD3 000/oz+ level of mid-2022. The rhodium price was also heavily reduced, while platinum was still lagging in the expected take off despite evidence of a fundamental supply deficit in the market.
Te retraction in PGM prices has seen South African mine operators scale back on production, especially in palladium, and defer expansion or new projects. The negative market sentiment and an uncertainty about the trajectory of PGMs in the automotive market and processing capacity previously has led Northam Platinum Holdings CEO, Paul Dunne, to doubt whether significant new production would be built in the future. He saw it as highly improbable that the industry will see new investment in new prospects especially if there is no processing capacity. He further noted that current prices removed the incentive for new mines which will see a depletion of South Africas resource base. The damage has been done, and depletion is inevitable.
One of the challenges that South African platinum miners face is the fact that profit is volume-based production. The near consistent grade in the Merensky and UG2 units of the Bushveld Igneous Complex, provides continuity in terms of grade, but the lack of high-grade areas limits the potential to respond to rapid changes in market conditions. The increasing depth and distances of underground operations, coupled with increasing production costs and ongoing infrastructure and power issues, place producers under further pressure.
The South African platinum industry has also suffered another blow, with government opposing the export of platinum concentrate to the Kingdom of Saudi Arabia. This would potentially limit other new operators attracting investment from the KSA to fund projects, specifically as the ambition of the KSA is to expand their source of ore and concentrate for processing in the KSA and establishing it as the new world processing hub.