Cai Lian News Agency (Zhengzhou, reporter Zhang Keyao) news,
Platinum prices moved all the way down in the late second quarter, but showed signs of a rebound this week. Industry insiders said that the price of platinum in the first half of the year was weak, due to the industry’s concern about the lack of demand for downstream automobiles, and the turbulence in South Africa, the main producer of platinum, the tight supply of platinum is expected to increase, the price of platinum has risen recently, and it is expected to fluctuate in a narrow range in the near future, and the market will begin to rise at the end of the third quarter.
It is understood that platinum will continue the situation of short supply in the previous two years this year. The World Platinum Investment Association predicts that the total supply and demand for platinum this year is expected to reach 245 tons and 250 tons. In the long run, under the background of “carbon peaking” and “carbon neutrality”, the demand for platinum in the fields of automobile emission reduction and hydrogen energy industry application will surge, and the contradiction between platinum supply and demand may continue.
It is expected to rise by the end of the third quarter
(2020.1-present platinum price trend, source: Shanghai Gold Exchange)
In the first half of this year, the domestic platinum price fluctuated greatly. According to data from the Shanghai Gold Exchange, platinum prices fluctuated after the impact to a high of 280 yuan/g in the first quarter was blocked, but fell all the way down to about 230 yuan/g from mid-May until it gradually stabilized in July, and the latest price has exceeded 240 yuan/g.
Deng Weibin, head of the Asia-Pacific region of the World Platinum Investment Association, revealed that the weakening of platinum prices in the first half of the year is related to the demand of the downstream automotive industry, when the shortage of automotive chips, the market is worried that the demand for platinum group metals will be weak, platinum and other platinum group metal prices fell after a surge in the first quarter, however, the recent turmoil in South Africa, platinum supply issues have been paid attention to, so the price has turned upward in the near future.
So, how will platinum prices perform in the second half of the year? Deng Weibin believes that the domestic platinum price is expected to rise back to 260-270 yuan / gram in the second half of the year, because the market demand is relatively strong, especially in the industrial field, the recent price has maintained a narrow fluctuation, affected by the future downstream stocking and other demand, it is expected to rise at the end of the third quarter, but from the perspective of industrial demand and cost, after the end of the round, platinum prices are less likely to fall.
Platinum is a silvery-white hard metal, with the characteristics of both precious metals and industrial metals, more than 80% of the world’s platinum-containing deposits are located in South Africa, and the remaining platinum ore is concentrated in Russia, Zimbabwe and other places. According to the 2020 data of the World Platinum Investment Association, the four major demand areas and proportions of platinum are automotive (31%), industrial (26%), jewelry (23%), and investment (20%).
Tao Minghao, director of the Beijing Gold Economic Development Research Center, introduced that in China’s platinum consumption structure, jewelry demand accounts for the largest proportion, accounting for more than 60% of the global demand for platinum for jewelry, followed by the automobile industry, crude oil industry, chemical industry, glass manufacturing and electronics industry, etc., the ratio of platinum used in industry and platinum in jewelry is basically 4:6.
Industrial demand surges, and supply and demand contradict or continue
Among the A-share companies, Zijin Mining (601899. SH), silver nonferrous (601212. SH) involved upstream platinum mines, Guiyan Platinum Industry (600459. SH), Taihua (600281. SH) involves the industrial application of platinum, brand jewelry (002574. SZ), Cuihua Jewelry (002731. SZ), Chao Hongji (002345. SZ), China Gold (600916. SH) involves platinum jewelry.
Cai Lian News Agency reporter called the securities department of the above company as an investor and found that platinum jewelry in the domestic jewelry sector is small, platinum is in good demand in the industrial field, platinum mining still takes time.
Among the above-mentioned platinum jewelry companies, each company has a small proportion of platinum jewelry revenue. Chao Hongji Securities Department said that in the domestic jewelry market, the proportion of platinum jewelry has been shrinking, due to the relatively soft texture, single style and other characteristics, platinum jewelry is replaced by K gold jewelry.
In the industrial sector, platinum price fluctuations have limited impact. Guiyan Platinum and Taihua Securities Department both said that the raw materials required by the company are not all outsourced, and they will cooperate with customers for recycling and reuse, which can reduce the cost of raw materials to a certain extent. Guiyan Platinum Securities Department revealed that the company will hedge raw material price fluctuations through hedging.
Zijin Mining Securities Department said that the company’s platinum mine in South Africa has entered the pre-construction stage, but it is expected that it will take a long time to fully put into production and generate platinum mine revenue. The Department of Nonferrous Securities said that the company’s own production and operation does not involve platinum mines, but only holds the shares of Span Yi Jingshui, the world’s third largest platinum producer, and there is no clear information on whether it will cooperate with Span Yi Jingshui to develop South African platinum mines in the future.
Deng Weibin said that in recent years, domestic platinum jewelry sales have not been very good, and the proportion of platinum demand in the industrial field is expected to increase in the future. Guiyan Platinum Industry downstream applications are mainly in the automotive, manufacturing, Guiyan Platinum Securities Department said that the company is optimistic about the growth of downstream industries, in order to meet market demand, the company may expand production capacity in the future.