Platinum and palladium receive yet another futures trading boost

This audio is brought to you by Endress and Hauser, a global leader in process and laboratory measurement technology, offering a broad portfolio of instruments, solutions and services for industrial process measurement and automation.
Platinum and palladium are among four precious metals included in new futures contracts launched in London, World Platinum Investment Council (WPIC) reports, amid New York-listed Intercontinental Exchange's commencement of trading precious metals derivatives in London.
Intercontinental Exchange's contracts, which also cover gold and silver, are linked to London's established daily benchmark price auctions and offer market participants an additional way to manage price exposure and risk. For platinum and palladium, the development could provide greater flexibility for investors and industrial users, although the impact on market liquidity will depend on trading activity and uptake, WPIC noted on LinkedIn.
Platinum and palladium was also given a major trading boost from September 28 when China gave international access to the trading of the two platinum group metals (PGMs) on the Guangzhou Futures Exchange (GFEX), where domestic exchange activity has been improving price discovery since the launch in November last year.
The GFEX's investment scope now reaches out to foreign institutional investors and giving them full access to platinum and palladium futures and options contracts.
On the GFEX, the form of the platinum and palladium being traded also goes beyond bar and includes sponge. This is tailor made for China where most industrial and automotive end-users of platinum and palladium much prefer it in the form of ready-to-use sponge.
Expected to result from international participation in platinum and palladium is price discovery and the emergence of increased arbitrage opportunity.
Interestingly, GFEX adheres to the technical specifications, quality standards and responsible platinum and palladium sourcing rules of the London Platinum and Palladium Market (LPPM) and entered the futures fray alongside the likes of Chicago Mercantile Exchange (CME), London's LBMA, Japan's Osaka Exchange as well as over-the-counter trading entities.
DEMAND OUTLOOK
Widening industrial uses for PGMs have been good for the demand outlook for the metals, which are hosted overwhelmingly in South Africa.
PGMs are needed, for example, for proton exchange membrane (PEM) electrolysers that generate hydrogen as well as in fuel cell electric vehicles (FCEVs) that convert the hydrogen back into electricity for mobility or stationary poser.
Reiterated in a report earlier this month is that Algeria and Tunisia have joined Italy, Austria and Germany in strengthening cooperation on the 3 300 km SoutH2 Corridor pipeline project, which aims to transport renewable hydrogen from North Africa to European markets in the early 2030s. The five countries signed a political declaration to support project development, financing and commercial partnerships.
Also, US Society of Piping Engineers and Designers president Javier Rubio has reported that the 18 green hydrogen projects under construction or in operation across Europe, China, India, and Saudi Arabia represent about $26-billion in announced and reported project investment, excluding projects without confirmed figures.
Japanese vehicle manufacturer Toyota regards hydrogen as an important energy source, WPIC has noted, in realising a carbon-neutral society. It introduced its first FCEV, the Mirai, in 2014 and has sold it in more than 30 countries and regions.
Since 2019, Toyota has also begun supplying fuel cell systems that generate electricity from hydrogen, and has provided more than 3 500 fuel cell systems to over 100 customers worldwide for applications such as buses, rail, and stationary generators. In partnership with others, Toyota has also developed hydrogen cartridge and hydrogen sauna, promoting decarbonisation in areas of everyday life as well.
Fuel Cell Works reports that...