Platinum Markets Face Unprecedented Supply Shortfall

The platinum market is heading toward its third consecutive annual supply deficit, with analysts forecasting a substantial shortfall of 692,000 ounces for 2025. This structural supply gap has already propelled the abrdn Physical Platinum Shares ETF (PPLT) to impressive gains of over 68% year-to-date, drawing increased attention to the precious metal's investment potential.

What's driving this renewed interest in platinum? The accelerating global transition to hydrogen energy represents a fundamental shift. Platinum serves as a critical component in both electrolyzers and stationary fuel cells, with market researchers anticipating a notable 20% surge in demand from this sector as early as 2026. This emerging structural demand trend appears positioned to sustain market tightness over the long term.

Production Declines Worsen Supply Constraints

Mining output for platinum is expected to reach a five-year low in 2025, creating significant pressure on available supplies. While recycling rates have improved, these increased volumes fall far short of bridging the growing supply-demand gap. Simultaneously, substantial quantities of physical platinum are flowing into U.S. storage facilities, a movement accelerated by trade policy developments and the metal's recent inclusion on the U.S. Critical Minerals List. These physical withdrawals from the market are further tightening an already constrained supply situation.

Should investors sell immediately? Or is it worth buying abrdn Physical Platinum Shares ETF?

PPLT ETF Offers Direct Physical Exposure

For investors seeking straightforward access to physical platinum, the abrdn Physical Platinum Shares ETF provides several distinct advantages:

• Maintains holdings exceeding 1.2 million ounces in secure London vaults
• Provides direct physical ownership without derivative instruments or futures contracts
• Undergoes regular independent audits and verification processes
• Trades at a minimal 0.7% discount to net asset value

With assets under management totaling $1.85 billion, PPLT dominates the physical platinum ETF marketplace. Its closest competitor, PLTM, manages just $137 million in assets despite offering lower fees (0.50% versus PPLT's 0.60%).

Given the fundamental supply constraints and emerging demand from clean energy technologies, market conditions appear supportive for continued strength in platinum markets. The combination of structural deficits and hydrogen-related demand growth creates a compelling long-term narrative for this industrial precious metal.