Platinum and palladium prices tend to fluctuate due to a highly concentrated supply environment. Together, Russia and South Africa control 70-80% of the global supply of platinum-group metals.
Platinum and palladium have emerged as important parts of the world's car industry since the 1970s, and the supply structure of platinum has not changed much since then.
Platinum futures fell $28 an ounce on the New York mercantile exchange on Thursday, down 2.4 percent from the previous day's 15-month high. Palladium futures fell 4.8 percent to below the $700 mark, down from last June's high.
The jump in supply was one reason behind the sharp fall in the price of platinum group metals that day. Data from South Africa suggest that the country's platinum veins are rumbling.
South Africa's platinum and palladium production fell 12.4 percent in June from the previous month, but may's output was the second-highest on record and still up from a year earlier.
Sales of platinum group metals in local currency also hit a record high in May. Capital Economics notes that this was helped by the fact that platinum, in South African currency terms, recorded its highest monthly growth since the first half of 2014. The South African rand was one of the worst performers among emerging market currencies in the first half of the year, although it has strengthened in recent months.
Capital Economics, based in London, said the increase in output reflected the fact that continued price increases since the start of the year had reduced producers' financial incentive to cut output.
Separately, industry bellwether Amplats has decided to ramp up production in the second half of the year to meet its 2016 production target after production plunged earlier this year amid supply disruptions.
The jump in production in the second quarter is likely a result of producers preparing for summer wage negotiations with unions. In an industry where Labour accounts for half of operating costs, producers may decide to build up inventories in case negotiations lead to supply disruptions.
Despite the pullback, the platinum price list is now ahead of gold in 2016, up more than 33 percent year-to-date. Platinum prices rose 12.7 percent in July, their best monthly performance since 2012.
Sister metal palladium had its best month in a decade, surging 21 percent in July. Its performance in July accounted for most of its year-to-date gains. The metal has rallied 47 percent, or $220 an ounce, since its low on Jan. 12.