Platinum is the latest precious metal to whip up volatility in global markets. While dust was still settling on the early-week decline in gold and silver, platinum rose 6.4%. The precious metal surged to $1,646 per ounce on the spot market. This intraday jump was the biggest on record since 2020.
Futures prices also rose, but by only 4.1%, leaving a highly unusual gap between physical and paper markets. The London spot premium over Nymex futures widened to more than $53 per ounce, nearly double the prior day's level. As these two markets typically trade in lockstep, the difference signaled a rush for physical metal.
The surge unfolded hours after Beijing dismantled a two-decade-old tax benefit. China, the largest platinum consumer, has had a value-added tax rebate since 2003. Yet, the Ministry of Finance announced a phase-out beginning November 1, on both imported and domestically produced metal, Bloomberg reported.
Also Read: Platinum Market Faces Tightest Conditions In Five Years: Report
Under the old policy, China Platinum Co. was effectively the only firm allowed to import platinum without the 13% VAT, giving it a competitive advantage.
Removing that exemption "is quite a significant step for the platinum market in China," said Weibin Deng, Asia-Pacific regional head at the World Platinum Investment Council (WPIC), as reported by The Business Times.
Potential rivals "had been suffering for many years because the policy was only granted to one particular company," he added.
The end of the rebate triggered a jump in Shanghai premiums above global prices, prompting speculation that buyers were pulling metal forward ahead of the deadline, and amplifying global tightness.
Structural Market Deficit and Supply Concerns
That tightness isn't new. Platinum has been one of 2025's top-performing commodities, buoyed by soaring demand in China, where jewelry purchases and investment bar buying have accelerated sharply. Meanwhile, Banks in London have been aggressively competing for dwindling inventories.
Platinum's main market issue is a concentrated, eroded mine supply. Nearly 90% of production in 2024 came from South Africa, which houses the Bushveld Igneous Complex. This single asset holds around 75% of known global reserves.
Earlier this year, WPIC's CEO Trevor Raymond warned that "the platinum market is in structural deficit." He noted robust growth from China, especially in jewelry and investment products.
Despite a higher price that should incentivize additional supply, inventories haven't replenished meaningfully. WPIC expects global demand to outstrip supply for the remainder of this decade. The organization quotes the metal as an essential component of the hydrogen economy and laboratory equipment.
Price Watch: abrdn Physical Platinum Shares ETF (NYSE:PPLT) is up 78.33% year-to-date.
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