Platinum, a rare and precious metal, plays an important role not only in the jewelry industry, but also in industrial applications. Because of its physicochemical properties and unique catalytic properties, it has a wide range of applications in automotive catalytic converters, chemical industry and electronic products. As a unique technology metal, platinum plays an important role in ensuring the safety of national strategic mineral resources, promoting the transformation and upgrading of the new energy field, and promoting the achievement of the "double carbon" goal.
The complexity of the platinum market, coupled with the dynamic changes in the global supply and demand landscape, makes the volatility of platinum prices a hot topic for market participants. In this context, on the afternoon of September 25, 2024, the "Platinum Quarterly Talks and the Development of China's Platinum Market" event hosted by the World Platinum Investment Association and specially supported by the China Financial Information Center of Xinhua News Agency was held at the China Financial Information Center.
More than 30 representatives from financial institutions and media from Industrial and Commercial Bank of China, China Construction Bank, CITIC Futures, Guotai Junan Futures, GF Futures, Shenyin Wanguo Futures, Xinhu Futures, Industrial Futures, Shanghai Petroleum and Natural Gas Trading Center, as well as Shanghai Securities News, Economic Information Daily, China Business News, etc., attended the meeting and participated in the exchange. The event was broadcast live online on Xinhua News Agency's live cloud, "Lujiazui Dialogue" video account, and "Shanghai Platinum Week" video account, with more than 200,000 views.
Deng Weibin, General Manager of Platinum World Association Asia Pacific, said in his speech that the interpretation of this quarterly report will cover the supply and demand forecasts of the global platinum market in the second quarter and full year of 2024. In the platinum investment market, the association will continue to expand its partner and market coverage, which will not only provide investors with more choice, but also help them identify market dynamics and select appropriate strategies to increase their allocation to platinum investments. In Europe and North America, platinum is favored by retailers due to its lower cost of ownership. The association is also further increasing the sales team training programs and investor education activities of its partner companies to raise investor awareness of platinum. Meanwhile, in China, platinum investment demand was strong in the second quarter of 2024, with sales volume up more than 100% year-on-year. He said that the association will continue to help cooperative enterprises to enhance consumer demand through innovative design, so as to make the platinum product series more diversified and competitive in the market.
Zhang Wenbin, head of China market research at the World Platinum Investment Association, interpreted the Q2 2024 quarterly report, which is divided into three parts: First, reviewing the supply and demand situation of the platinum market in the second quarter of 2024 and the forecast for the whole year, supply increased by 4% year-on-year, mainly driven by supply from South Africa, while recycling remained stable and global platinum demand increased by 13%. 2024 will enter the second year of supply shortage, with a gap of nearly 32 tons; Second, to explore the market themes that investors are concerned about, although investment in platinum bars and platinum coins has declined in North America and Japan, China's retail investment has increased by 121% year-on-year, platinum demand in the automotive industry will be more durable, and mining supply will face long-term pressure.
Finally, Zhang Wenbin said that as for price drivers, they are mainly affected by a combination of fundamentals, the economy and market sentiment. With palladium and rhodium prices at high levels and demand for platinum substitution on the rise, the future of platinum prices is expected to be driven by fundamentals rather than sentiment as supply and demand shortages deepen.
During the dialogue session, Deng Weibin, General Manager of Platinum World Association Asia Pacific, and Li Zhiqin, Assistant President of China Financial Information Center of Xinhua News Agency, focused on "The Development of China's Platinum Market". Deng Weibin first introduced in detail the characteristics of platinum with high density, high ductility and high melting point, and pointed out that platinum is widely used in the four major fields of automotive, industry, jewelry and investment.
Li Zhiqin pointed out that in recent years, the price of gold has remained high, and platinum, as a very young precious metal, will face various problems in market development? In this regard, Deng Weibin believes that the advantages of platinum compared with other rare precious metals such as gold and silver lie in its scarcity, value depression and strategic importance, which is related to the mainland's dual carbon strategy and energy transition. He said that platinum does have the disadvantage of having a weak market foundation.
So what is the market potential for platinum? Deng Weibin believes that from an investment point of view, although the market value of platinum is undervalued in the short term, with the future listing of platinum futures varieties will bring about improved liquidity and a shift in platinum market sentiment, the investment value of platinum will become more and more prominent. At the same time, promoting the development of new quality productivity has also laid a solid foundation for the long-term improvement of the platinum market. From the perspective of precious metals practitioners, due to the fierce competition in the gold market and the trend of domestic substitution of platinum in high value-added fields such as targets, catalysts and new materials, it has brought new opportunities for the development of platinum jewelry and investment products.
In addition to the opportunities, we still need to keep a clear head and actively respond to the constraints and challenges of the development of the platinum market. Deng Weibin believes that the current problem in the development of the platinum market mainly lies in the top-level design of the market mechanism. First of all, we should pay more attention to the strategic importance of the platinum group metals market. In terms of taxation and recycling policies, platinum group metals are not ordinary commodities, but high-value precious metals. Second, it is necessary to build a more perfect trading market and establish management methods to deal with price risks. These factors will lead to the inability to revitalize domestic platinum group metals resources, and there is a significant risk of loss of strategic resources.
Deng Weibin said that the purpose and goal of the World Platinum Council (WPIC) is to promote platinum investment and expand a sustainable and healthy market. China's platinum market has achieved remarkable results in recent years, expanding the market segment of physical platinum investment from scratch. At the same time, the cooperative company achieved 5.8 tons of platinum investment product sales last year. In the future, WPIC will continue to deepen the infrastructure construction of the platinum trading and investment market, strengthen exchanges and cooperation between industries, and continue to explore and promote more platinum investment products that meet the needs of the Chinese market, so as to continue to contribute to the construction of the platinum market and the improvement of the industrial chain in China and the Asia-Pacific region.
It is reported that the "Platinum Quarterly Talk" is a quarterly industry event hosted by the World Platinum Investment Association and specially supported by the China Financial Information Center of Xinhua News Agency, aiming to interpret the latest global platinum supply and demand dynamics and market trends to the Chinese market. By building a platform for industrial exchanges and communication, we will discuss the development of the platinum group metals market that the industry and society are concerned about, and jointly promote the healthy, stable and high-quality development of China's platinum market.
Text: Yang Jingwen, Song Ziqi, Gu Zhiran
Picture, co-ordination: Gu Zhiran
Source of this article: China Financial Information Center Lujiazui Financial Network