What is Platinum Used For?

Platinum is the third most-traded precious metal in the world, ranking behind just gold and silver in trading volume. But its price tends to move in unique ways, largely driven by its industrial and automotive demand.

In this blog, we explore the various sources of platinum demand, why investors buy platinum, and different ways you can invest in platinum today.

Main uses of platinum

The highest demand for platinum comes from the automotive industry, industrial applications, platinum jewellery, medical devices, and investment.

1. Automotive industry and emission control

The automotive sector is the single largest consumer of platinum, historically accounting for around 36% to 44% of total global demand according to the World Platinum Investment Council. This demand is mainly driven by the production of catalytic converters (autocatalysts) used to reduce harmful emissions in internal combustion engines (ICE) and hybrid vehicles.

Catalytic converters

Catalytic converters are tiny ceramic honeycomb structures coated with other platinum group metals (PGMs) – including platinum powder and palladium – and housed inside a vehicle’s exhaust system. Their purpose is to convert harmful engine emissions (like carbon monoxide and nitrogen oxides) into harmless carbon dioxide, nitrogen, and water vapour.

Today, more than 90% of new internal combustion vehicles sold globally contain an autocatalyst, driven by strict emission standards mandating the reduction of toxic pollutants.

Fuel cell electric vehicles (FCEVs)

Fuel cell electric vehicles (FCEVs) are electric cars powered by hydrogen that create their own electricity using a fuel cell stack that emits only water vapour and heat. Here, platinum serves as a crucial catalyst in the proton-exchange membrane (PEM), facilitating chemical reactions between hydrogen and oxygen to produce electricity with zero tailpipe emissions.

FCEVs are able to refuel in just minutes and are becoming increasingly popular in heavy-duty transport such as buses and fleet trucks.

Sensors and components

Platinum is known for having high heat resistance and excellent electrical conductivity, making it widely used across vehicle oxygen sensors, temperature control units, spark plug tips, and airbag deployment systems.

2. Industrial applications

Industrial uses account for 23% to 35% of total platinum demand, where it spans across heavy manufacturing, electronics, and clean energy production.

Green hydrogen production

Platinum is a vital catalyst in proton exchange membrane (PEM) electrolysers used to produce carbon-free green hydrogen from renewable energy. In other words, platinum catalysts use renewable electricity to split water into green hydrogen and oxygen.

This carbon-free hydrogen can then replace fossil fuels in steelmaking, aviation, power generation, and chemical manufacturing. As research continues to evolve, this use in green technology is expected to significantly increase annual platinum consumption.

Chemical and fertiliser manufacturing

Platinum catalysts are used to manufacture nitric acid, a primary ingredient used in agricultural fertilisers. They’re also used in petroleum refining to achieve greater yields of high-octane fuels per barrel.

Glass manufacturing equipment

Because it's able to withstand extremely high temperatures without corroding, oxidising, or contaminating high-purity specialty glass, platinum is an essential component in the glass manufacturing industry. It’s used to line furnaces, crucibles, stirrers, and bushings used to manufacture LCD screens, fibre optics, and synthetic glass fibres.

Electronics & storage

Modern mechanical hard disk drives (HDDs) contain trace amounts of platinum alloys in the magnetic thin-film coatings of their spinning platters, where they help increase storage capacity. Platinum is also used in semiconductors, thermocouples, platinum electrodes, and home safety sensors.

Read More: The Importance of Platinum

3. Platinum jewellery

Jewellery is the third-largest source of platinum demand, making up about 24% to 30% of annual global demand. There are many reasons for this: platinum is strong and durable, resists tarnish, and holds gemstones exceptionally well without wearing down over time. It’s also naturally hypoallergenic, making it ideal for individuals with sensitive skin or metal allergies.

Natural platinum is silvery-white in colour. Unlike white gold, which is often mixed with yellow gold and plated, platinum jewelry is also typically 95% pure. To make it easier to work with, it’s typically alloyed with other metals such as palladium, copper, and cobalt.

While it may sound modern to some people, platinum has actually been used in jewellery for over 2,000 years, starting with the indigenous people of South America. Ancient Egyptians were also known for using platinum alloys for decoration. It wasn’t until the 18th century, however, that Europeans started using platinum in jewellery.

Today, platinum is the preferred choice for engagement rings in the United States and wedding bands in Japan, although China remains the largest market for platinum jewellery.

4. Medical devices & cancer treatments

Medical applications represent a smaller, but growing, segment of platinum demand.

Biocompatible implants

Because platinum is non-reactive and well-tolerated by the human body, platinum wires are widely used in implantable electronic devices such as pacemaker electrodes, neuromodulation devices, stents, and micro-catheters.

Oncology drugs

Platinum compounds are used in major chemotherapy drugs, including cisplatin, carboplatin, and oxaliplatin. These treatments work by binding to cellular DNA to inhibit cancer cell division and are widely used to treat testicular, ovarian, lung, and bladder cancers.

5. Investments

Platinum investment is perhaps the most variable demand segment, ranging from -8% to 14% of net annual demand over recent years. It’s traded much like other precious metals, such as gold or silver, in the form of physical bullion bars and coins, exchange-traded funds (ETFs), mining stocks, and futures contracts.

Keep Reading: Platinum vs Silver: Which Is the Better Investment?

Why investors buy platinum

Extreme rarity & concentrated supply

Platinum is an exceptionally rare metal. Although platinum and gold exist in similar concentrations in the Earth's crust (around 0.005 parts per million), platinum is roughly 15 to 30 times scarcer in terms of annual mine production.

Platinum supply is also heavily concentrated geographically, with around 70% of global mining output coming from South Africa. Because of this, any issues such as operational challenges, energy grid instability, workers’ strikes, or rising extraction costs in the region could create ongoing supply constraint risks, providing a strong floor for physical market value.

Dual demand drivers

Unlike gold, which derives most of its value from monetary sentiment and investment demand, platinum’s market value is driven mostly by its heavy industrial consumption.

Thanks to tightening global emissions standards, there’s high demand for platinum in catalytic converters. The growing transition towards green energy – specifically hydrogen fuel cell vehicles (FCEVs) and proton-exchange membrane (PEM) electrolysers – is likely to also increase demand over the coming decades.

Some analysts expect the global platinum market to grow at a CAGR of 5.3% from 2023 to 2030, eventually hitting a revenue of $9.9 billion.

See: Is Platinum More Expensive Than Gold?

Portfolio diversification

Investors often use precious metals as a way to diversify their portfolios away from traditional assets like stocks and bonds. In this case, platinum is unique in that it combines the safe-haven traits of precious metals with deep exposure to industrial demand.

Because platinum's market value is driven by a unique combination of industrial demand, automotive manufacturing, and geographic supply constraints, its price movements often exhibit low historical correlation with broader equity markets.

Potential long-term growth

Economic and technical barriers make opening new platinum mines difficult. This means that platinum supply cannot quickly scale up to meet surges in demand. With the metal seeing expanding applications across clean energy, medical devices, and luxury jewellery in emerging markets like China and India, there’s potential for supply-demand deficits to create upside potential for investors focused on long-term value accumulation.

Ways to invest in platinum

There are three main ways to invest in platinum, each coming with its own set of advantages and considerations: purchasing pure platinum bullion bars and coins, investing in platinum exchange-traded funds (ETFs), and buying stocks of platinum mining companies.

1. Platinum bars and coins

One of the most popular ways to invest in platinum is by purchasing bullion bars and coins. You can buy platinum bullion from precious metal dealers in various weights, including the standard 1 oz platinum coin or platinum bars ranging from 1 gram up to 100 grams. Popular platinum coins include the Platinum Australian Kangaroo and Platinum Britannia.

The main difference between investing in platinum coins vs bars is that coins carry slightly higher premiums due to their intricate designs and more complex manufacturing process. Some may also carry additional value beyond their platinum content, such as historical significance or collectibility. Platinum bars, on the other hand, are much simpler in design and used purely for investment purposes.

The key benefit of buying platinum bullion is that you’ll have direct ownership of a tangible, highly liquid asset with zero counterparty risk. However, you’ll have to consider secure storage and insurance, which may come with additional costs.

2. Platinum ETFs

If you’d prefer to invest in platinum without having to manage storage and security, exchange-traded funds (ETFs) may be a more suitable option. These investment funds track the market price of platinum and can easily be bought and sold on exchanges just like stocks. The largest platinum ETF is the abrdn Physical Platinum Shares ETF, which holds roughly $1.86 billion in assets.

The main benefits of platinum ETFs is that they offer high liquidity and eliminate the logistics of having to store and secure the physical metal itself. However, the trade-off is that you’re holding a financial security rather than the underlying physical asset itself, meaning you miss out on the tangible benefits of the metal. ETFs also often charge ongoing annual management and administration fees.

3. Platinum mining companies

Another way to gain indirect exposure to platinum is by investing in publicly-listed mining companies involved in the exploration, extraction, and production of platinum.

One of the benefits of investing in platinum mining companies is that they offer operational leverage. Since mining companies have fixed costs, a small change in the price of platinum can lead to a much larger percentage change in the company's profits. For example, a 10% rise in platinum prices could double a miner's profit, leading to outsized returns compared to holding the physical metal itself.

However, holding mining stocks comes with its own set of additional risks. These investments can be highly volatile, with prices affected by everything from platinum production to company management, operational costs, and broader stock market volatility.

Keep Reading: How to Invest in Platinum: Tips & Strategies

Invest in platinum today

If you’re ready to add platinum to your precious metals portfolio, you’re in the right place. At StoneXBullion, we stock a wide range of platinum bullion bars and coins, including the popular 1 oz Platinum Britannia and 10 gram Valcambi Suisse Platinum Bars.

We're the only non-bank dealer in Europe buying directly from all major state mints worldwide, offering you maximum authenticity and exclusive access to the most sought-after bullion products. Browse our collection of platinum bullion products with live prices updated every 60 seconds, and enjoy safe and insured delivery across the UK and Europe.

FAQ: What is platinum used for?

What is the largest use of platinum?

The automotive industry is the largest consumer of platinum, accounting for roughly 40% of global annual demand. Platinum is a key component of catalytic converters, which help turn toxic vehicle emissions like carbon monoxide into less harmful gases like carbon dioxide and water vapour.

Is platinum rarer than gold?

Yes, platinum is much scarcer than gold. Although both metals exist in similar concentrations in the Earth's crust (around 0.005 parts per million), platinum is roughly 15 to 30 times scarcer in terms of annual mine production.

Why is platinum cheaper than gold?

Even though platinum is rarer than gold, it's much more affordable because its market value relies on industrial manufacturing rather than investor safe-haven demand. Gold, on the other hand, is a monetary reserve asset. Central banks and investors buy gold to protect against inflation and crisis, which can drive its price higher during periods of economic uncertainty.

Is gold or platinum a better investment?

Neither gold nor platinum is a better investment, they each play different roles in a portfolio. Gold is traditionally viewed as a safer, more stable store of value while platinum behaves more like a volatile commodity thanks to its high industrial demand.