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In Zimbabwe, the government announced in mid-February that it was nationalizing platinum reserves owned by Zimplats and handing them over to other investors. In addition, the government has given platinum miners two years to build a refinery within Zimbabwe for processing platinum ores. This follows the announcement last year that platinum mining companies would be forced to transfer 51% ownership to local groups. With the hostile investment climate in Zimbabwe, which has the second highest platinum reserves after South Africa, it seems unlikely that significant expansion of production or development of new mines in Zimbabwe is probable.

The palladium market also faces significant supply risks. Russia is currently the largest producer of palladium, accounting for 43% of global production in 2012, with South Africa second at 37% of the 6,570,000 ounces of palladium mined globally in 2012. The majority of Russian palladium production was from Norilsk Nickel, but sales from Russian stockpiles were estimated to be 250,000 ounces in 2012 with indications that the state stockpiles of palladium are close to being depleted. From 2008 to 2011, palladium sales from Russian stockpiles averaged over 900,000 ounces per year, or about 13% of annual global supply. If that supply is exhausted, the palladium market deficit could significantly exceed the deficit currently projected by analysts.

The market had largely ignored this decline over the past several years as PGM demand for use in autocatalysts (a.k.a. catalytic converters) dropped substantially as a result of lower automobile demand following the 2008 financial crisis. Now, however, with automobile demand recovering, supply deficits, that were projected for both platinum and palladium in 2012, are expected to continue into 2013.

From 1980 to 2008, platinum demand grew at an average rate of 5% per year. Demand then dropped 15% in 2009 due to the global economic crisis, primarily because of the decreased demand for autocatalysts. Autocatalyst consumption rebounded in 2010 but is still well below levels from 2008 due to lower automobile demand in Europe. The European automobile market is important for platinum demand due to the much higher proportion of diesel engines which tend to use more platinum than palladium. Rapid growth in automobile sales from emerging economies is anticipated to result in increased platinum and palladium consumption, and is expected to be bolstered by the increased adoption of stricter environmental standards in Asia. Strong automobile demand growth continues in China, which reported a 46% increase in automobile sales in January 2013. Platinum jewellery demand has also been strong due to demand from China and investment demand is also increasing due to investor interest in ETFs like Sprott's recently launched Physical Platinum and Palladium Trust. Due to falling supply the platinum market is anticipated to see a reported 400,000 ounce deficit in 2012 or approximately 7% of global platinum supply.

While platinum demand increases have been somewhat moderated by lower European automobile sales, palladium demand has shown strong growth since 2002 and is now at record levels due in particular to autocatalyst demand and Johnson Matthey estimates the market was at a 915,000 ounce deficit in 2012, or approximately 14% of global palladium supply. Autocatalyst manufacturers have been substituting palladium for platinum as much as possible in the past decade due to the pricing disparity between platinum and palladium. Accordingly, palladium use in autocatalysts is now more than double the amount of platinum used and growth is strong due to the strength in automobile demand in China. That demand is expected to continue to grow rapidly as the number of cars per capita in China increases (it is currently about 85 cars per 1000 people, compared to about 812 cars per 1000 people in the United States), as emission standards improve and as more cars are sold to China's burgeoning middle class. Palladium prices have moved from around 20% of platinum prices to 40% in the past four years due to demand growth for palladium in autocatalysts. This price convergence could continue if Russian palladium stockpiles are close to being depleted.