Recycling woes, Chinese jewellery platinum pivot hold hope for PGM prices

Northam Platinum CEO Paul Dunne,on 09 november 2023.(Photo: Felix Dlangamandla)

9 Jun 2025

Vehicles are also not being replaced as often, with fewer cars being scrapped as a result. With low platinum group metals prices squeezing the margins of recyclers, the upshot is that far less PGM supply is returning to the market via this pipeline.

The platinum price quietly hit a four-year high last week at more than $1,125 an ounce, and some developments have unfolded largely below the radar screen that help to explain that bounce.

One is the decline of the platinum group metals (PGM) recycling industry in the US – the world’s largest – which, like mining companies, has been hard hit by the collapse of prices in recent years. This trend means that there is less supply coming to the market from recycling.

The second trend is in China, where record gold prices have forced a hard pivot in the jewellery industry to platinum, which is currently fetching a third of gold’s price, making it a bargain if you want to put a ring on it.

northam platinum dunne Northam Platinum CEO Paul Dunne. (Photo: Felix Dlangamandla)

In an interview with Daily Maverick, Northam Platinum CEO Paul Dunne sketched out these two trends and how they are potentially underpinning the price of platinum and other PGMs.

“Recycling, like mining, is very price sensitive,” Dunne said. “It is not for free and a low price is a disincentive. When prices were high, every piece of scrap came back to the market. Now the scrap guys are not selling.”

That scrap comes in the form of the catalytic converters used for capping harmful emissions – but not C02 – with platinum heavily used in diesel engines and palladium and rhodium in the petrol versions.

Just four years ago, when the PGM price basket was at record highs as rhodium surged to almost $30,000 an ounce, an average catalyst in the US containing four grammes of PGMs went for $370. Now it’s fetching $33, and the scrapyards are seen holding off until prices rise again.

More than 20% of global PGM supplies come from recycling, and this source is drying up.

Sibanye-Stillwater, for example, says it is bringing much less PGM metal to the market via its US PGM recycling business. It pushed more than 800,000 ounces a year into the market in 2019 and 2020, but since 2023, it has produced between 300,000 to 350,000 ounces a year, and the same is forecast for 2025.

“Recycling requires a lot of capital because you have to keep refinancing your inventory,” Sibanye spokesman James Wellsted told Daily Maverick. “And this extended period of high interest rates has added to the cost of financing inventory”.

Vehicles are also not being replaced as often, with fewer cars being scrapped as a result. With low PGM prices squeezing the margins of recyclers, the upshot is that far less PGM supply is returning to the market via this pipeline.

Production has also been in decline. According to the monthly mining production data published by Statistics South Africa, PGM output last posted an increase in November. But for the next four months in a row to the end of March, it recorded declining production.

Dunne said that in Northam’s view, these trends were “rebalancing the market ... I am cautiously optimistic about the price outlook.”

Chinese platinum pivot

Another arresting trend has been a switch in China’s massive jewellery industry to platinum from gold, which has seen its price soar this year to record highs of more than $3,500 an ounce, stoked by the uncertainty unleashed by the Trump administration’s ham-fisted tariff policies and robust demand from emerging market central banks seeking to diversify their holdings away from the dollar.

According to the World Platinum Investment Council, jewellery accounts for about 25% of platinum demand, so any move on this front will be material for the price.

“We saw a reduction in gold jewellery in China on a year-on-year basis in Q1 of 30%, while platinum on the same metric was up 20%,” Dunne said.

“It’s a value proposition – gold is worth three times as much as platinum now, three to one. It used to be two to one the other way.”

Indeed, “platinum” cards and memberships have long been the gold standard. But this status symbol is no longer reflected in the prices.

PGM prices scaled record highs in 2021 and remained red hot into 2022 before they came crashing back to Earth. Factors behind the collapse included the fragile global economic recovery and the hype around battery electric vehicles (BEVs), which don’t require PGMs.

There was also the curious case of Chinese chemists who substituted platinum for far more costly rhodium in the production of fibreglass – a move that helped to cool roaring rhodium.

Read more: On the sly, Chinese chemists have eroded SA’s PGM industry

But there are signs that PGM prices may have reached the bottom and are set for a rebound, with the recycling woes, the fall in production and the surge in platinum demand for bling important drivers, but not the only ones.

BEV sales remain robust but are not growing at their expected pace, and hybrid vehicles – which use PGMs – are fast gaining market share.

“About 22% of light-duty vehicles sold in the first quarter of the year in the United States were hybrid, battery electric, or plug-in hybrid vehicles, up from about 18% in the first quarter of 2024,” said a recent report by the US Energy Information Agency (EIA).

“Among those categories, hybrid electric vehicles have continued to gain market share while battery electric vehicles and plug-in hybrid vehicles have remained relatively flat.”

Rhodium’s price is up above 15% in 2025 to date at more than $5,500 an ounce. Palladium is up around 8% while platinum’s price is almost 20% higher at four-year peaks, according to Johnson Matthey data.

The PGM market is not shooting the lights out yet. But there are glimmers of hope that the worst is behind the industry and that prices are now being underpinned. DM

What this means

A few years ago, South African PGM producers were posting record profits from record prices and threw the Treasury a lifeline in the form of record taxes and royalties paid.

The Treasury no longer has that fiscal crutch, but any rise in PGM prices from the depressed levels of late will help to boost the state’s coffers.

The PGM industry in South Africa also directly employs almost 175,000 people, according to the Minerals Council, but the sector cannot grow and create more jobs without higher prices.

South Africa accounts for about 70% of the world’s PGM production, making it a crucial source of export earnings.

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