Platinum’s Persistent Rally: Supply Squeeze Fuels ETF Gains

abrdn Physical Platinum Shares ETF US0032601066

The abrdn Physical Platinum Shares ETF (PPLT) continues its upward trajectory, powered by a deep and persistent structural deficit in the platinum market. Strong industrial consumption, coupled with constrained supply chains, is providing sustained momentum for both the precious metal's spot price and the exchange-traded fund that tracks it.

Beyond the specific supply-demand dynamics of platinum, broader macroeconomic currents are lending support. Expectations for potential interest rate cuts from the U.S. Federal Reserve, ongoing inflation concerns, and geopolitical trade tensions are creating a favorable environment for the entire precious metals complex. This backdrop has helped propel the platinum price to approximately $1,662.70 per ounce, marking a staggering increase of more than 76% over the past twelve months.

Dissecting the Supply-Demand Imbalance

Market fundamentals reveal a picture of sustained tightness. Analysts project a third consecutive annual deficit for 2025, estimated at 692,000 ounces. This shortfall is driven by an anticipated 2% contraction in supply meeting robust demand across several key verticals.

• Automotive Sector: Demand for platinum in catalytic converters is running 10% above the five-year average, largely fueled by its use in hybrid and gasoline-powered vehicles.
• Investment Buying: Purchases of physical bars and coins are forecast to surge by 47%, with significant activity originating from China.
• Jewelry Fabrication: This segment has also seen growth, with demand rising by 7%.

Inside the PPLT ETF

The PPLT fund offers investors exposure to the performance of physical platinum by holding the metal directly. All bars are stored in secure vaults under the custody of ICBC Standard Bank in London. This structure of direct physical ownership significantly reduces counterparty risk when compared to derivative-based investment vehicles.

• Assets Under Management (AUM): ~$2.11 billion
• Total Expense Ratio (TER): 0.60%
• Benchmark: LBMA Platinum Price PM
• Distribution Policy: The fund is accumulating; it does not pay dividends.

Performance and Trading Metrics Reflect Market Strength

The ETF's performance data vividly illustrates the current market trend. Since the start of the year, PPLT has delivered an impressive price return of 77.78%. Shorter-term performance remains positive, with the fund gaining over 6% in the past month alone.

Trading liquidity is robust, with an average daily trading volume of around 414,000 shares over the previous three-month period. The fund typically trades close to its net asset value (NAV), indicating efficient price discovery in the market.

The ongoing fundamental picture of supply deficits and broad-based demand continues to provide a solid foundation for platinum pricing. Investors can expect further transparency with the trust's upcoming independent audit of its physical holdings.