The platinum market has tightened to unprecedented levels in the past few days as tariff fears and speculative buying pull metal from the key London and Zurich markets into warehouses in the US and China.

Following a record rally last month, spot prices have soared to fresh all-time highs and the implied cost of borrowing the metal for one month has hit the steepest level in data going back to 2002. The inflow of platinum into facilities linked to the New York Mercantile Exchange on Thursday was the second-highest on record.

US President Donald Trump’s erratic trade threats led more than half a million ounces of platinum to flow into US warehouses earlier this year to capture premium prices driven by tariff fears — a surge of shipments similar to the one seen in markets for industrial metals such as copper.

Though no figures exist for how low inventories are in London and Zurich, stocks have also been drawn down by record Chinese imports of 36 tons in the second quarter.

Spot prices have surged almost 60% this year, and platinum’s unusual scarcity in the dominant over-the-counter spot market in London has led the precious metal’s annualized one-month borrowing costs to spiral close to 40%. Most of the time that rate is close to zero.

While prices retreated slightly on Tuesday, there’s little sign that the market tightness is easing. The price structure known as backwardation — with buyers paying more for the closest deliveries than for longer-dated contracts to secure supplies — only intensified this month, Jonathan Butler, head of business development at Mitsubishi International in London, wrote in a note.

“A combination of tariff-related dislocation, physical buying in Asia and speculative interest led to extreme market tightness,” he said. “The difference now is that the backwardation is deeper and more widespread across the curve than at any time in more than 20 years.”

Lease rates might also in part have been driven higher by platinum users’ skepticism about the steep price rally, according to Trevor Raymond, chief of industry body World Platinum Investment Council.

“Because the metal has been rangebound between $950 and $1 100 an ounce for years, many market participants didn’t see the rally as sustainable, they said ‘we don’t need to react, we can lease the metal,’” he said. Given the now prohibitive cost of borrowing platinum, some of those borrowers may soon end up buying metal to end those leases, rather than rolling over the loans.

Spot platinum edged 0.8% lower on Tuesday, to $1 439.15 an ounce as of 1:57 p.m. in New York.

Stocks in American warehouses had began to decline in April once platinum was exempted from Washington’s first batch of tariffs, bringing US prices back in line with London and Zurich. But US premiums surged once again after Trump unexpectedly announced a 50% tariff on copper.

Although platinum is still exempt, the copper levy has “upped tariff risk in the white metals significantly,” Nicky Shiels, head of metals strategy at MKS Pamp SA said in a note.

In addition to investment demand, platinum is used in catalytic converters and laboratory equipment. The WPIC estimates a supply deficit of almost one-million ounces this year, further eroding dwindling above-ground stocks.