Platinum's Growing Appeal in the Global Economy: Insights from Shanghai Platinum Week
Key Ideas
- Platinum's appeal is increasing due to its discount to gold, industrial applications, and inclusion on critical mineral lists of many countries.
- New physically settled platinum and palladium futures in China are expected to transform risk management and boost demand for platinum products.
- The Shanghai Platinum Week highlighted the vital role platinum group metals play in the global economy's technological advancement, particularly in hydrogen technology.
The World Platinum Investment Council (WPIC) CEO, Trevor Raymond, highlighted the growing appeal of platinum at Shanghai Platinum Week. The event, co-organised by WPIC, showcased new physically settled platinum and palladium futures introduced by the Guangzhou Futures Exchange, aiming to enhance price risk management and increase demand for platinum products. Attendees heard presentations on various applications of platinum group metals (PGMs) in industries such as hydrogen, semiconductors, medicine, and jewellery. WPIC emphasized the importance of ongoing collaboration for sustainable growth in the PGM market. The event also addressed China's new reverse-invoicing tax policy, which might affect recycled PGM supply. WPIC research director Edward Sterck suggested ways to boost Chinese platinum demand through harmonizing tax rules and launching domestic PGM derivatives. The breakthrough in platinum and palladium futures contracts at the Guangzhou Futures Exchange offers 12-month contracts for improved hedging flexibility and settlement options. This change allows businesses to hedge price risks and manage operations effectively, benefiting industries like platinum jewellery and investment products.