Platinum prices are on track for their strongest monthly rally in nearly four decades in December, fuelled by the EU’s U-turn on its 2035 combustion-engine ban, a tight supply backdrop and rising investment demand for precious metals.
Platinum and palladium, both used in autocatalysts that reduce car exhaust emissions, have surged this year as US tariff uncertainty and a rally in gold and silver helped offset long-term headwinds from the rise of electric vehicles.
The EU’s plan unveiled in December is “a steroid jab for PGMs, prolonging their use in catalytic converters”, analysts at Mitsubishi said.
“Not only is the extension indefinite, but the EU will require ongoing tighter emission levels, which by extension will require higher PGM loadings.”
Platinum, also used in other industries such as jewellery, is up 33% so far in December, its biggest jump since 1986, according to LSEG data.
After hitting a record high of $2,478.50 per ounce on Monday, the metal is heading for its biggest yearly growth on record of 146%. Its sister metals, palladium and rhodium, are up 80% and 95% respectively so far in 2025.
Both platinum and palladium also benefited from defensive stock-building and tighter supply in the regional physical markets due to outflows to the US as Washington included the metals on the US critical minerals list.
The market expects more clarity on US tariffs in January.
The start of PGMs futures trading in China a month ago gave another boost, attracting heavy speculative flows and prompting the Guangzhou Futures Exchange to adjust price limits.
These contracts are the first domestic price-hedging mechanism for the PGMs in the world’s second-largest economy, which is also the top PGMs consumer, relying heavily on imports.
“If Chinese spot import buying remains elevated, the major test for platinum group metals will likely come after there is clarity on US tariffs,” Macquarie analysts said.
Platinum price set for biggest monthly gain in 39 years on EU auto policy boost