The Fourth annual Shanghai Platinum Week (SPW 2024), co-organised by the WPIC, China Gold Association, Anglo American, and the China Precious Metals Industrial Committee, concluded with a wealth of insights and discussions on the Platinum Group Metals (PGMs) market.
While numbers are still being finalised, provisionally, this year, SPW 2024 welcomed more than 500 attendees from over 300 organisations, with online viewership reaching 455K on the first day and 317K on the second day, far exceeding any previous year.
Over the course of the week, attendees were treated to more than 42 presentations and 37 organisations displaying their PGM containing products, which ranged from platinum investment products through jewellery to technical innovations relating to applications from hydrogen to semiconductors and medicine. WPIC also hosted site visits to the Shanghai Jiading Hydrogen Park, where attendees had the opportunity to meet with the corporate teams and view the production facilities of a number of hydrogen related companies, as well as have the opportunity to meet with policy advocates.
Here are 10 things we learnt from this year's event:
- China’s first platinum and palladium futures contracts: The Guangzhou Futures Exchange (GFEX) announced details of the first PGM derivatives in China. These physically settled platinum and palladium futures are set to transform domestic price risk management and boost demand for platinum products.
- Challenges in the recycling industry: China's new reverse-invoicing tax policy with a 3% tax rate is unfriendly to scrap collection. The policy, aiming to boost tax revenue and regulate individual collectors, that the sector heavily depends on, is particularly challenging for an industry accustomed to operating at slim margins. It could negatively impact future recycled PGM supply in China.
- Response to tax policy: Efforts to revise the new tax policy with tax officials remain underway. The application of tax disincentivises recycling and may ultimately reduce total tax returns to the exchequer if kept in place.
- Strong investment demand: Representatives from various companies highlighted the successes in developing platinum as an investment product, driven by platinum’s wide price discount to gold and high-quality products. Edward Sterck, Director of Research for WPIC, suggested that harmonising platinum VAT rules with gold and launching domestic PGM derivatives could further boost Chinese platinum demand.
- Platinum jewellery market insights: The Platinum Guild International discussed the challenges faced by the platinum jewellery market in China, explaining how newly developed technological innovations are crucial to ongoing market development.
- Mine supply headwinds: Discussions by Tharisa, SFA (Oxford), and SBG Securities revealed that many PGM mines are operating at a loss due to the weak PGM basket price. With miners reacting by cutting capex, the risk is that supply erosion exacerbates market deficits, especially in the context of the emerging trend of higher-for-longer demand from the automotive sector.
- Developments in hydrogen technology: Platinum catalysts are being used in the latest alkaline electrolyser designs to increase current density and efficiency, helping to offset load variability challenges when paired with renewable energy.
- Green hydrogen market potential: There is a significant addressable market for decarbonising fossil-based hydrogen production, estimated at over 20 million tonnes per annum in China alone, presenting a substantial opportunity for green hydrogen supply.
- Innovative hydrogen applications: Hydrogen-enriched water is being tested for improving crop yields and fish farming in Shanghai rural areas.
- Highlights from keynote speeches: The keynote speeches at the Fourth annual Shanghai Platinum Week emphasised the critical importance of PGMs in the China-South Africa trading relationship, as highlighted by a speech from South Africa's Consulate General. Anglo American discussed extensive market development efforts focused on the green transition, modern life, and wealth, while Northam Platinum highlighted the societal importance of mining. The London Platinum and Palladium Market (LPPM) noted opportunities for Chinese refineries to achieve LPPM accreditation and the benefits this would accrue to them.