Shanghai event highlights key PGM developments
This year’s platinum insight conference, the Shanghai Platinum Week 2024, served as a “core platform” for industry innovation and collaboration, reports global platinum body World Platinum Investment Council (WPIC) CEO Trevor Raymond.
Held from July 8 to 11 in Shanghai, China, the event once again demonstrated the critical role that platinum group metals (PGMs) play in both the global economy and technological advancements, he says.
“The insights shared during the event underscore the dynamic nature of the PGM market, from innovations in hydrogen technology, to the expanding investment demand in Asia,” he explains.
In addition, the event illustrated the appeal of PGMs and the commodities being bolstered by their wide discount to gold, increasing industrial applications, and the strategic importance highlighted by their inclusion on many countries' critical mineral lists.
The event, co-organised by the WPIC, Chinese government agency China Gold Association, diversified miner Anglo American, and regulatory body China Precious Metals Industrial Committee, welcomed more than 500 attendees from over 300 organisations, with online viewership reaching 455 000 on the first day and 317 000 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.
The 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 several hydrogen-related companies, and were presented with the opportunity to meet with policy advocates.
Anglo American also discussed extensive market development efforts focused on the green transition, modern life and wealth, while integrated PGM producer Northam Platinum highlighted the societal importance of mining.
Key Takeaways
The organisers highlighted ten take aways from the event, the first being The Guangzhou Futures Exchange (GFEX) announcing details of the first PGM derivatives in China, which are China’s first platinum and palladium futures contracts.
These physically settled platinum and palladium futures are set to transform domestic price risk management and boost demand for platinum products.
Secondly, challenges in the recycling industry were addressed where China’s new reverse-invoicing tax policy with a 3% tax rate was found to be “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, the organisers report. This could negatively impact future recycled PGM supply in China.
The third takeaway was efforts to revise the new tax policy with tax officials remaining underway. According to event organisers, the application of tax disincentivises recycling and may ultimately reduce total tax returns to the exchequer if kept in place.
Representatives from various companies also highlighted the successes in developing platinum as an investment product, driven by platinum’s wide price discount to gold and the high-quality products possible with the commodity.
WPIC research director Edward Sterck suggested that harmonising platinum value added tax (VAT) rules with gold and launching domestic PGM derivatives could further boost Chinese platinum demand.
The fifth point addressed platinum jewellery market insights, where global marketing organisation 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.
Discussions by PGM and chrome miner Tharisa Minerals, mining house adviser SFA (Oxford), and capital market company SBG Securities, revealed the sixth take away, which is that many PGM mines are operating at a loss owing to the weak PGM basket price.
With miners reacting by cutting capital expenditure, 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.
The seventh take away was that PGM 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, driving developments in hydrogen technology.
Green hydrogen and its market potential were listed as the eighth take away. The organisers stated that there is a significant addressable market for decarbonising fossil-based hydrogen production, estimated at over 20-million tonnes a year in China alone, presenting a substantial opportunity for green hydrogen supply.
Innovative hydrogen applications, such as hydrogen-enriched water being tested for improving crop yields and fish farming in Shanghai’s rural areas was listed as the penultimate take away.
The tenth take away recapped some of the highlights from keynote speeches that emphasised the critical importance of PGMs in the China-South Africa trading relationship, as highlighted by a speech from South Africa's Consulate General.
In conclusion, global over-the-counter trading centre London Platinum and Palladium Market (LPPM) noted opportunities for Chinese refineries to achieve LPPM accreditation and the benefits this would accrue to them.
Source: https://www.miningweekly.com/