No other global exchange allows delivery of sponge, pure metal in a powder form which is most needed by industrial and automotive end users. This ensures that contracts meet the precise needs of the real economy.
Furthermore, the delivery mechanism is robust. Metal is accepted from both approved domestic refiners and international suppliers accredited by the London Platinum and Palladium Market, ensuring trustworthy and reliable physical settlement.
Will GFEX’s platinum and palladium contracts promote greater integration with global commodities markets?
By making the contracts available to both institutions and individuals domestically and, in due course, internationally, GFEX creates a new, accessible RMB-denominated benchmark.
Enhanced cross-market arbitrage opportunities will increase market liquidity, opening platinum up as an investment to larger pools of assets under management.
For asset managers in China, it formally places platinum as a viable investment asset class. Market transparency will also be improved through the publication of GFEX’s daily warehouse inventory updates.
Do you see this development changing WPIC’s forecast for investment demand in China?
There may be a one-time demand uplift from platinum warehoused to back margin requirements, the stocks of which could increase as trading volumes on the exchange increase. (A margin deposit is the initial amount of money a trader must put down to open a leveraged trading position. It acts as collateral and is a percentage of the full value of the trade.)
WPIC’s initial supply and demand forecast for 2026 does not currently reflect any investment demand increase from GFEX. Even without considering the potential upside from GFEX’s platinum and palladium futures, however, physical bar and coin investment demand in China is expected to grow for the seventh consecutive year in 2026, reaching 453 koz.
What is WPIC’s relationship to GFEX?
Strategically, WPIC is firmly committed to the development of the platinum investment market in China, and the country offers huge potential in this regard. We are focused on building strong relationships with major organisations such as GFEX as we believe that this is the best way to nurture the growth in platinum investment product availability that is needed to meet growing investor demand.
Specifically, we are highly supportive of GFEX’s initiative and have had an informal advisory role in the research and development phase of the launch process, providing platinum and palladium market insights. We also assisted GFEX by enabling dialogue with relevant industrial third parties and by inviting the exchange to participate in London Platinum Week in 2024, and Shanghai Platinum Week every year since 2023.
Has the recent change in VAT rules on platinum in China affected the launch?
The impact of the new policy is complex and far reaching, but a key impact is that it creates a level playing field between the Shanghai Gold Exchange and other trading platforms, including GFEX. In our view, it will improve market efficiencies in China, which we believe is supportive of GFEX’s platinum futures contracts.