Platinum set for biggest monthly gain in 39 years on EU auto policy boost
Platinum prices have soared in December, marking their strongest monthly rally in almost 40 years. The surge is attributed to several factors, including the EU’s reversal on its 2035 combustion-engine ban, a tight supply environment, and increasing investment demand for precious metals.
Both platinum and palladium, which are essential components in autocatalysts that help reduce car exhaust emissions, have experienced significant growth this year. Despite long-term challenges posed by the rise of electric vehicles, the uncertainty surrounding U.S. tariffs, and a rally in gold and silver prices have helped bolster the market for these metals.
The EU’s recent announcement regarding the extension of platinum group metals (PGMs) in catalytic converters has been likened to a “steroid jab” by analysts at Mitsubishi. The indefinite extension, coupled with stricter emission regulations, is expected to drive up demand for PGMs in the automotive industry.
Platinum, which is also utilized in industries like jewelry, has seen a remarkable 33% increase in December alone, marking its largest jump since 1986. The metal reached a record high of $2,478.50 per ounce earlier in the month and is on track for a record annual growth of 146%. Palladium and rhodium, two other PGMs, have also experienced substantial gains of 80% and 95%, respectively, in 2025.
The market has been further influenced by defensive stock-building and limited supply in regional physical markets, as well as the inclusion of platinum and palladium on the U.S. critical minerals list. Clarity on U.S. tariffs is anticipated in January, which could impact the future trajectory of PGM prices.
The introduction of PGM futures trading in China has provided a significant boost to the market, attracting speculative investment and prompting adjustments to price limits on the Guangzhou Futures Exchange. These contracts represent the first domestic price-hedging mechanism for PGMs in China, the world’s second-largest economy and top consumer of PGMs.
As Chinese spot import buying continues to rise, the future of platinum group metals hinges on developments in U.S. tariffs. Analysts at Macquarie emphasize the importance of clarity in this area for the sustainability of PGM prices.
In conclusion, the platinum market has experienced unprecedented growth in December, driven by a combination of factors including regulatory changes, supply constraints, and investment demand. The outlook for PGM prices remains uncertain, with developments in U.S. tariffs and Chinese import activity poised to shape the market in the coming months.
