Sometimes, market wisdom doesn't add up. In 2025, with platinum and palladium equities scraping historic lows, and everyone bemoaning the 'inevitable' EV revolution, that phrase echoes louder than ever. In this dispatch, we'll wander through the wild terrain of Platinum Group Metals—and their unlikely comeback—as well as swing by energy, agriculture, and precious metals, where quiet shifts might upend yesterday's storyline. Buckle up: context and contradictions ahead. The below excerpt is an outline from the latest Goehring & Rozencwajg Market commentary - in my view one of the best sources in the commodity space.
1. Platinum Group Metals: Bargains Nobody Wants (Yet)
The Platinum Group Metals (PGMs) sector is experiencing a rare disconnect between market sentiment and underlying fundamentals. Despite a global PGM market valued at $41.59 billion in 2024 and projected to reach $56.61 billion by 2033, investor interest remains at record lows. Over the past three years, PGM equities have dropped nearly 80% from their peaks, echoing the skepticism seen in the late 1990s—a period that ultimately preceded massive returns for contrarian investors.
Much of the negative sentiment stems from the widely held belief that the rise of electric vehicles (EVs) will erode long-term PGM demand. However, research shows that this narrative may be overstated. Internal combustion engine (ICE) vehicle sales have rebounded to nearly 90 million units annually, and forecasts suggest that even with EV market share rising, ICE and hybrid sales will remain robust through at least 2033. The Asia Pacific region, which commands over 44% of global PGM market share, continues to drive demand, especially in the automotive sector.
A key insight from Goehring & Rozencwajg’s Q1 2025 commentary is the overlooked impact of hybrid vehicles on PGM demand. Unlike EVs, hybrids require catalytic converters—and due to frequent engine cycling, they often need up to an additional gram of platinum or palladium per vehicle. This incremental demand is quietly supporting the market, even as headlines focus on EV adoption. As the report notes, “Platinum remains a mechanical ideal in the hybrid and emissions regulation era.”
Stricter global emissions standards are also pushing up average PGM loadings per vehicle. While the global average is about 5 grams, regions like Europe and Japan require as much as 7–9 grams per car. Upcoming regulations in China and India are set to increase their requirements as well, further strengthening the Platinum Demand Forecast.
The automotive sector remains the primary driver of PGM demand, accounting for roughly 65% of total use. With supply forecast to lag demand for the third consecutive year in 2025, and with significant portions of current mine supply uneconomic at today’s prices, the setup is reminiscent of past cycles where negative sentiment gave way to outsized gains. For investors willing to look beyond the current gloom, the PGM Market Trends suggest a sector poised for a potential turning point.
2. Regulation Roulette: How Global Rules and Tight Supply Might Upend the PGM Script
Global Emissions Regulations are rapidly rewriting the playbook for platinum group metals (PGMs). As new standards like EU7 in Europe, CN7 in China, and BS7 in India take effect, automakers face a simple reality: more platinum, palladium, and rhodium are needed per vehicle. Research shows that average PGM loadings in Europe and Japan already sit at 7–9 grams per car, while China and India—long laggards—are set to leap to 5 grams or more by mid-2025. The United States holds steady at 5 grams, but with turbocharged engines now standard in half of new vehicles, even these numbers are trending upward.
This regulatory surge is not just a technicality. It is the single strongest force shaping the PGM market trajectory, as Goehring & Rozencwajg emphasize:
Regulation is now the single strongest force shaping the PGM market trajectory.
Stricter emissions rules mean catalytic converters must be loaded with more PGMs to meet compliance. Turbocharged and future engine designs, which burn hotter and cleaner but emit more NOx, require even higher PGM doses—sometimes two grams extra per vehicle. The result? Demand for platinum, palladium, and rhodium is climbing, even as electric vehicle adoption remains slower than many predicted.
Yet, the supply side tells a starkly different story. The Platinum Demand Forecast points to a third consecutive year of deficit, with shortfalls of 750,000 ounces in 2023, 680,000 ounces in 2024, and a projected 500,000 ounces in 2025. Above-ground inventories, which once cushioned the market, have dropped from 5 million ounces in 2022 to an estimated 3 million by the end of 2025—a 40% decline. Meanwhile, 40% of global mine supply is uneconomic at current PGM basket prices of $1,200 per ounce, squeezing margins for giants like Anglo American Platinum and Sibanye-Stillwater.
Regulatory wild cards continue to emerge. New US rules on alcohol detection systems and the proliferation of turbocharged engines further distort demand trends, making the Palladium Market Balance and Rhodium Price Trends increasingly difficult to forecast. While palladium is finally moving toward market balance after 13 years of deficit, platinum and rhodium remain in the grip of persistent shortages.
In this high-stakes environment, the intersection of tightening supply, evaporating inventories, and relentless regulatory pressure is setting the stage for a pivotal shift in the PGM script—one that few investors or automakers can afford to ignore.
3. Unexpected Bedfellows: What Commodities, Gold, and Weather Surprises Reveal About Timing and Opportunity
The first quarter of 2025 has brought a new set of surprises to the global commodities landscape, challenging conventional wisdom and highlighting the importance of timing and adaptability. The Precious Metals Market stands out, with gold and silver prices soaring 19% as physical demand surged—yet, paradoxically, investor enthusiasm for gold mining equities remained muted. The GDX and SIL ETFs rose 35% and 25% respectively, but ETF flows into gold stocks stayed soft, suggesting that the rally in precious metals may still be in its early innings.
This divergence between physical accumulation and equity investment is not unique to gold. It echoes across the broader resource sector, where market sentiment often lags underlying fundamentals. As Goehring & Rozencwajg note, “Commodities often feel dead just before their next run.” This is particularly evident in the Palladium Market Balance and platinum group metals, where physical demand remains robust, but equities are priced for pessimism.
Energy markets are also at a crossroads. The likely peak in US shale oil production in 2024 marks a potential turning point, reminiscent of previous supply peaks that preceded historic bull cycles. The gold-to-oil ratio, now at 56 barrels per ounce against a long-term median of 17, flashes a strong signal that crude oil may be undervalued. OECD petroleum inventories are near multi-decade lows, reinforcing the view that the sector could be on the cusp of a significant revaluation.
Meanwhile, copper’s narrative has shifted dramatically. A sharp 10% drop in Chinese demand during 2024 swung the global market from deficit to surplus, only for demand to rebound by 25% in Q1 2025. This volatility underscores the growing influence of the Asia Pacific Market and the unpredictability of industrial commodity cycles.
Agriculture, too, faces its own inflection point. Grain ending stocks have fallen 30% after yield downgrades, and weather anomalies threaten to repeat the devastating patterns of the 1930s Dust Bowl. The risks are amplified by tightening supply and the critical role of climate, making the sector highly sensitive to further shocks.
In sum, the 2025 natural resource markets are defined by unexpected bedfellows and shifting narratives. From the resilience of the Precious Metals Market and the impact of Clean Energy Technologies on PGMs, to the delicate Palladium Market Balance and the pivotal role of the Asia Pacific Market, the lesson is clear: opportunity often emerges where consensus is weakest, and timing is rarely straightforward.
