Investing

How to Invest in Platinum Stocks

Platinum is the third most traded precious metal in the world after gold and silver, and investment demand is growing.

It is also an industrial metal that is widely used in a variety of sectors. The four main uses of platinum are in catalytic converters for the automotive industry; as a material in jewelry; in industrial applications in various sectors including fertilizers, hard drives, electronics, and glass manufacturing; and in medical devices and pharmaceuticals.

The long-term outlook for platinum is strong, making the sector potentially compelling for investors. Here’s a brief overview of platinum supply and demand dynamics, as well as a look at a few different ways to start investing in platinum.

In this article

What is platinum?

Platinum is a silvery-white precious metal that is soft and ductile. It is highly prized for its durability and excellent catalytic properties, such as a high melting point, resistance to corrosion and simple acids, and ability to serve as a carbon monoxide oxidation catalyst. Platinum’s symbol on the periodic table of elements is Pt.

Platinum is the most abundant and widely used of the platinum-group metals (PGMs), which also includes palladium, rhodium, iridium and other metals.

Platinum is not typically mined on its own, but rather alongside palladium and other PGMs within nickel and copper ores or chromitite.

Platinum demand trends

Platinum’s diversity of applications has helped to create a resilient market for this metal even in an economic downturn. Total platinum demand for 2024 is expected to come in at 7.95 million ounces, mostly on par with the previous year’s figure, according to the World Platinum Investment Council (WPIC), which provides quarterly market overviews. The WPIC is projecting a mere 1 percent decline in platinum demand for 2025 to 7.86 million ounces.

The four biggest demand sectors for platinum are automotive (40 percent), industrial (31 percent), jewelry (25 percent) and investment (5 percent).

For 2025, WPIC expects to see a slowdown in demand from the industrial sector to be mostly offset by increased demand for platinum coming from the automotive, jewelry and investment sectors.

Automotive

In the automotive industry, both platinum and palladium are used in catalytic converters for vehicle exhaust systems. Due to their differing properties, platinum is preferred for diesel engines and palladium is the metal of choice for gasoline engines.

In recent years, platinum has been increasingly substituted for palladium in gas-powered vehicles due to high prices for palladium. And although the price disparity has decreased, analysts expect that the substitution trend will continue for some time.

Another important factor impacting this segment of the market is the emerging market for electric vehicle (EVs), which do not require catalytic converters to control emissions. The global slowdown in EV sales and production has proven positive for platinum.

Demand from this sector is expected to decline by 2 percent year-on-year in 2024 to 3.17 million ounces as global auto sales and production are in decline, especially in Europe. For 2025, the WPIC is forecasting 2 percent growth to 3.25 million ounces, an eight-year high in platinum demand from the automotive sector.

Industrial

Demand from the industrial sector is forecast to have dropped 1 percent in 2024 to 2.43 million ounces due to a slowdown in chemical plant start-ups after “five years of aggressive capacity expansions in China.” Looking into 2025, the council sees “cyclically weak” platinum demand coming from the industrial sector, resulting in a forecasted 9 percent year-on-year decline largely caused by ‘negligible new glass capacity additions.’

Jewelry

Global jewelry consumption is projected to grow by 5 percent in 2024 to reach 1.95 million ounces, followed by a 2 percent gain in 2025. Regionally, demand growth is centered in India and the United States as platinum becomes a much more affordable option compared to gold.

Investment

Looking over to investment demand for platinum, in 2024 WPIC expects a 1 percent drop in over the previous year to 393,000 ounces of the metal. However, that trend is set to reverse in 2025 for a growth rate of 7 percent on strong platinum ETF inflows and the launch of new products including platinum bars at Costco in the US and platinum coins by China Gold Coin Group in China.

Hydrogen

In recent years, the transition to a green economy and the growth of hydrogen technologies has created another growing market for platinum. The WPIC has noted that the hydrogen market, specifically proton exchange membrane electrolyzers and hydrogen fuel-cell electric vehicles, is expected to become ‘a meaningful component of global demand by 2030 and potentially the largest segment by 2040.’

For now, the hydrogen sector represents 1 percent of total platinum demand in 2024, up from 0.4 percent in the previous year.

Platinum supply trends

The platinum market is destined to remain in a supply deficit for a third-straight year in 2025, according to WPIC estimates, with a shortfall of 539,000 ounces of the metal. However, the demand-supply imbalance in the platinum market is narrowing from a deficit of 759,000 ounces in 2023 as increased recycling production — up 14 percent — offsets 2 percent declines in mine output. Analysts are forecasting a net increase of 1 percent in total platinum supply for 2025 to 7.324 million ounces.

The projected 2 percent decrease in mined platinum supply is attributed to expected lower production out of South Africa and North America.

South Africa is by far the leader in terms of mined platinum production and reserves, according to US Geological Survey data, accounting for about 67 percent of global output. The country’s Bushveld Complex is the largest PGM resource in the world. However, ongoing electricity shortages and transport line disruptions have restrained platinum mine output from the country in recent years.

How to invest in platinum

Investors who believe the above market dynamics will eventually result in a higher platinum price may be interested in investing in the metal. There are several ways to invest in platinum, from platinum mining stocks and platinum ETFs to physical bars and coins and platinum futures.

Platinum stocks

One way to invest in platinum is to own shares of a platinum-mining company. Depending on your risk tolerance, both major platinum miners, junior exploration companies offer an easy entry point.

Major platinum mining stocks

Anglo American Platinum (OTC Pink:AGPPF,JSE:AMS)
Anglo American Platinum, or Amplats, is a leading primary producer of PGMs, supplying mined and recycled platinum products. The company operates the Mogalakwena mine, Amandelbult complex and Mototolo mine in South Africa’s Bushveld Complex. Its parent company, Anglo American (LSE:AAL,OTCQX:AAUKF), is planning to demerge Amplats in mid-2025 as part of its ongoing restructuring efforts, after which Amplats will list on the LSE.

Eastern Platinum (TSX:ELR,JSE:EPS)
Eastern Platinum, or Eastplats, has a number of directly and indirectly owned PGM assets in the Bushveld Complex of South Africa. In addition to its ongoing work recovering chrome from historical tailings, Eastplats is now ramping up production of PGM and chrome concentrates at Crocodile River’s new Zandfontein underground mine. The company expects PGM revenue to make up at least 65 percent of its revenue in 2026.

Impala Platinum Holdings (OTC Pink:IMPUF,JSE:IMP)
Impala Platinum Holdings, or Implats, is one of the most prominent platinum producers in the world. The company has majority ownership or joint ventures in four PGM mining operations in South Africa along with a refining facility, two PGM mining operations in Zimbabwe along with a concentrator, and one PGM mine in Ontario, Canada.

Tharisa (OTC Pink:TIHRF,LSE:THS,JSE:THA)
Tharisa is a vertically integrated PGM company, and through its subsidiaries its operations span from exploration through to production, beneficiation and distribution. Tharisa’s PGM assets include the Tharisa platinum-chrome mine in South Africa’s Bushveld Complex and the Karo platinum mine, which is now under construction in Zimbabwe.

Sibanye Stillwater (NYSE:SBSW)
Sibanye Stillwater has a diverse metals mining portfolio and is one of the world’s largest primary platinum and palladium producers. It recently adopted a circular economy business model that includes platinum recycling. The company has numerous PGM operations in South Africa and the United States. Its US Stillwater and East Boulder operations are in Montana’s Stillwater Complex, the country’s largest source of PGMs.

Junior mining stocks

Bravo Mining (TSXV:BRVO,OTCQX:BRVMF)
Bravo Mining is advancing its wholly owned Luanga PGM-gold-nickel exploration project in the Carajás Mineral Province of Brazil. The project has a maiden mineral resource estimate showing indicated resources of 4.1 million ounces of palladium equivalent at 1.75 grams per metric ton (g/t) and inferred resources of 5.7 million ounces at 1.5 g/t.

Canada Nickel (TSXV:CNC,OTCQX:CNIKF)
Canada Nickel Company is advancing its wholly owned flagship Crawford nickel-cobalt sulfide project located in the Timmins-Cochrane mining camp of Ontario, Canada. The project also hosts significant platinum and palladium mineralized zones.

Canada North Resources (TSXV:CNRI,OTCQX:CNRSF)
Canada North Resources wholly owns the late-stage Ferguson Lake exploration project in the Kivalliq Region of Nunavut, Canada. The polymetallic project hosts base metals nickel, copper and cobalt as well as PGMs.

Chalice Mining (ASX:CHN,OTC Pink:CGMLF)
Chalice Mining owns the Gonneville development project in Western Australia. The project hosts a mix of metals, including platinum, palladium, nickel, cobalt and copper. The Western Australia government has designated Gonneville a Strategic Project in recognition of the project’s importance for the country’s critical metals industry.

Clean Air Metals (TSXV:AIR)
Clean Air Metals is focused on its wholly owned exploration-stage Thunder Bay North critical minerals project in the Thunder Bay region of Ontario, Canada. The project hosts platinum, palladium, copper and niobium mineralization.

Lifezone Metals (NYSE:LZM)
Lifezone Metals has developed a hydrometallurgical processing technology, which it calls Hydromet Technology, as a cleaner alternative to smelting for base and precious metals refining. The company has a joint venture partnership agreement with Glencore (LSE:GLEN,OTC Pink:GLCNF); Lifezone will use its Hydromet Technology to recycle platinum, palladium and rhodium in the United States, and Glencore will act as the offtaker and marketer. Lifezone also owns the Kabanga nickel-copper-cobalt project in Tanzania.

Platinum Group Metals (TSX:PTM,NYSE:PLG)
Platinum Group Metals is working to bring into production its advanced-stage Waterberg palladium and platinum deposit in South Africa. First discovered by Platinum Group Metals, the project is now a joint venture with key partners that include Implats at 14.86 percent. Platinum Group retains a 50.16 percent position in Waterberg and will be the majority operator.

Ramp Metals (TSXV:RAMP)
Ramp Metals’ flagship project is the early-stage exploration Rottenstone SW property in Saskatchewan, Canada. It is situated adjacent to a northeast-southwest geological formation connected to the historic Rottenstone mine, which produced nickel, PGMs and gold.

Platinum bars and coins

Another investment option is the direct purchase of physical platinum bars or platinum coins through a bullion dealer.

One example is BullionVault’s online physical platinum market, which is supported by the WPIC, and gives private individuals access to vaulted platinum for the same prices currently paid by institutional investors. The market is open 24 hours a day, seven days a week.

Investors in the United States can also now buy 1 ounce platinum bars and coins at Costco, an option you can learn more about here.

Platinum ETFs

Those interested in platinum can also gain exposure via platinum exchange-traded funds (ETFs) and exchange-traded notes (ETNs). Here are a few to get you started.

iShares MSCI Global Metals & Mining Producers ETF (NYSE:PICK)
The iShares MSCI Global Metals & Mining Producers ETF provides investors with access to the global mining industry through an international basket of companies engaged in the extraction and production of metals, including platinum. Its holdings include Implats, Anglo American and Sibanye Stillwater. It has the lowest expense ratio on this list at 0.39 percent.

Aberdeen Physical Platinum Shares ETF Trust (ARCA:PPLT)
The Aberdeen Physical Platinum Shares ETF is designed to reflect the performance of the price of physical platinum less the trust’s expenses and holds platinum bars in a secure vault. It has an expense ratio of 0.6 percent.

Sprott Physical Platinum and Palladium Trust (ARCA:SPPP)
The Sprott Physical Platinum and Palladium Trust is another option that provides access to the physical platinum bullion market while allowing the flexibility of an exchange-traded security. It has the highest expense ratio on this list at 1.12 percent.

GraniteShares Platinum Trust (ARCA:PLTM)
The GraniteShares Platinum Trust tracks the spot price of platinum less trust expenses, and holds a physical portfolio of platinum ingots kept in a vault in London, UK. It has an expense ratio of 0.5 percent.

Global X Physical Platinum (ASX:ETPMPT)
Global X Physical Platinum provides Australian investors access to platinum held in JP Morgan storage facilities. It has a management fee of 0.49 percent.

Platinum futures

Another option for those looking to invest in platinum is platinum futures, a derivative instrument tied directly to the price of the actual metal. Futures are a financial contract between an investor and a seller. The investor agrees to purchase an asset from the seller at an agreed-upon price based on a date set in the future.

Rather than intending to take possession of the material asset, investors speculating in the futures market are instead making bets on whether the price of a particular commodity will rise or fall in the near future.

For example, if you buy a platinum futures contract believing the price of metal is set to rise, and your prediction proves correct, you could gain a return on your investment by selling the now more valuable futures contract before it expires. However, be advised that trading futures contracts is not for the novice investor.

Platinum futures are available for trade on the New York Mercantile Exchange (NYMEX), which is part of the CME Group.

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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