China’s Thirst for Platinum a Risk to Trump’s Auto Plan, Analysts Say
Udumbara
.
JOHANNESBURG—U.S. President Donald Trump’s pledge to rejuvenate the U.S. auto industry is threatened by China’s sudden thirst for platinum, a precious metal that’s largely irreplaceable in modern-day vehicle manufacturing, according to experts.
The risk to U.S. supplies of platinum is heightened by Washington’s fragile relations with South Africa, whose mines produce 80 percent of global platinum supplies, according to mining information service Africa Mining IQ.
Beijing and Pretoria, though, are close, as the Chinese Communist Party (CCP) supported the armed struggle against apartheid, waged by the majority party in South Africa’s coalition government, the African National Congress (ANC).
Trade analysts say supplies of platinum could dwindle, strangling American stocks, should China continue to buy it at a rapid rate.
“The trend started at the beginning of the year but spiked in April and is driven by China’s [state-subsidized] vehicle manufacturing sector and a booming jewelry market,” Peter Major, an independent metals and minerals analyst in South Africa, told The Epoch Times.
The WPIC’s data show that demand for platinum bars and coins in China more than doubled in the first quarter of 2025, making China the largest market for platinum retail investment, surpassing North America.
Platinum is a precious metal that’s highly malleable and doesn’t easily react with other substances. This makes it highly resistant to corrosion and chemical attack, attributes prized by both the auto and jewelry manufacturing industries.
Used in jewelry, platinum is a lustrous, silver-white metal.
The USGS describes platinum as one of the most versatile metals, as its unique properties make it fit for use in a wide variety of goods, including electronics, heavy military equipment such as tanks, and medical devices such as heart pacemakers.
But platinum’s primary use is in the vehicle manufacturing sector, said Elias Matinde, president of the Southern African Institute of Mining and Metallurgy.
.
“Platinum is used to make catalytic converters that reduce emissions from a vehicle’s exhaust by converting pollutants like carbon monoxide and hydrocarbons into less harmful substances like carbon dioxide and water,” Matinde told The Epoch Times.
Catalytic converters also contain two major critical minerals that are derivatives of platinum, namely palladium and rhodium—these act as catalysts to speed up the necessary chemical reactions.
Palladium and rhodium are also on the U.S. top 50 critical minerals list.
The WPIC says the United States buys most of its platinum directly from South Africa.
The platinum price is shooting to high levels, as it was last seen two years ago, because of high Chinese demand, said Major.
Johannesburg-based commodities trade analyst Kyle Gibson said investors are also pouring money into platinum, further strangling supplies.
“They’re shying away from the more traditional investment of gold because it’s now too expensive,” he told The Epoch Times. “The consequence of this is that the platinum price is now also climbing.”
While the United States remains the biggest importer of South African platinum, Beijing is catching up “rapidly,” Gibson said, and would surpass American imports of the precious metal from Africa’s largest economy should it continue at the rate it’s going.
Platinum is partly exempt from U.S. sanctions imposed on Moscow because of its war in Ukraine.
Other sources of American platinum are Germany, Belgium, Italy, Singapore, and Slovakia, but none of them have sufficient supply to make up a significant shortfall should South Africa reduce, or even stop, exporting to the United States.
“South Africa controls three-quarters of [the] global supply,“ Major said. ”It’s the biggest player by far, and this kind of dominance is not replaced simply by diversifying by using a variety of smaller sources; they’re not large enough to fill the gap.”
China’s other main platinum import sources include Hong Kong, Japan, Russia, and Switzerland.
Market intelligence analysts expect global demand for platinum to surpass supply for the rest of the decade.
South African government officials, speaking anonymously as they weren’t authorized to speak with the media, told The Epoch Times their country’s dominance in platinum is “a potential bargaining chip” to use in ongoing trade negotiations with the Trump administration.
Pretoria is scrambling to conclude a deal with Washington before an import tax of 31 percent on South African products is expected to start in July, and before the U.S. Congress’s expected termination of a preferential trade agreement that would see South Africa losing billions of dollars.
In recognition of platinum’s importance, Trump exempted it, as well as critical minerals of which South Africa is also a big supplier, from tariffs when he announced his reciprocal tariff strategy on April 2.
Pretoria wants the 31 percent tariff on other exports scrapped, or lowered, and is offering to import gas from the United States in a bid to correct the trade deficit between the two nations.
.
Toby Chance, trade spokesperson for the Democratic Alliance, the ANC’s main partner in government, told The Epoch Times: “Things got ugly between Trump and South Africa from the get-go this year, but I can’t foresee South Africa, under President Cyril Ramaphosa, waving any critical minerals or metals in Trump’s face and saying, ‘We’ll give more of this to China if you don’t give us this.’ That’s not Ramaphosa’s style. Some in his government want it to be his style, but it’s not.”
Ann Bernstein, director of the Center for Development and Enterprise in Johannesburg, agreed, but also told The Epoch Times: “It seems as if the world is becoming less predictable by the second, and who knows where negotiations are going to end between Washington and Pretoria.
“Ramaphosa wants a deal with the U.S., and his people will talk with the Trump administration, and they won’t stop talking, until Trump stops talking, about platinum or any other card that South Africa holds.
“Ramaphosa doesn’t like playing dirty, and it will take a lot for him to use his minerals and metals to play Beijing and Washington against each other to reap benefit for South Africa.”
.
