JOHANNESBURG (miningweekly.com) – Over the course of April and May, an inflow of more than half a million ounces of platinum poured into exchange-traded fund (ETF) holdings in the UK, the biggest since South Africa’s ETF initial public offering (IPO) on the Johannesburg Stock Exchange nearly a quarter century ago.

“The more than half a million ounce inflow we saw into the UK ETFs is the biggest ever addition into any of the regional ETFs, with the exception of when, for example, the South African ETF was first set up.

“That initial ETF IPO obviously attracted a lot of attention, and therefore a lot of demand for platinum, but this is the biggest non-IPO flow of material we've seen,” World Platinum Investment Council (WPIC) director of research Edward Sterck highlighted in an interview with Mining Weekly ahead of next week’s Shanghai Platinum Week from July 8 to July 11.

With studies suggesting that platinum is an effective diversifier of risk alongside other investments and a long-term store of value, Minerals Council South Africa members and South African mining company executives will be well represented at the Shanghai event amid globally up to $10-billion in assets already being invested in platinum.

Chinese investors have known platinum for many years as jewellery and with more people saving for retirement, having platinum as part of a retirement investment is being increasingly seen as making sense.

Shanghai Platinum Week 2024 comes at a time of buoyant platinum investment demand in China, boosted by an increased availability of investment products, including the 100 g Dragon platinum bar series and a 1 kg bar produced by Metalor. 

Last year, retail investment demand in China – encompassing coins and bars under 500 g – grew 37% year-on-year to 52 000 oz. At least a further 100 000 oz of demand came from platinum bars in the 500 g to 1 kg range. This year, further growth is forecast, with coin and small bar below 500 g investment demand alone expected to reach 60 000 oz. 

There are no platinum mines in China and having platinum on Chinese soil is seen as a good idea.

China is the world’s largest consumer of platinum group metals (PGMs) and South Africa is the biggest supplier of PGMs.

With a physically backed platinum ETF, the value of shares held by investors is matched 100% by physical platinum in the form of investment bars. In the UK, Japan and the US, platinum ETFs can be held as part of self-managed pension schemes, with possible associated tax benefits, according to WPIC.

An ETF tracks the price of a commodity and ETFs are listed entities that issue shares that can be traded on an exchange, meaning that prices can vary throughout the day. Investors can buy and sell shares in a platinum ETF either directly from the stock exchange on which it is listed or through a broker, with a minimum investment of one share.

FIVE-YEAR PGMS PROGRAMME

Ahead of the New York Platinum Week taking place in September, a company that has had a long association with South Africa as a PGMs promoter – Johnson Matthey – has joined the US Department of Energy's Critical Materials Innovation Hub (CMI) to help shape their five-year PGMs programme.

From hydrogen fuel cells and electrolysers to sustainable fuels and chemicals, PGMs are viewed as being poised to play a key role in the world’s advance to a net-zero emissions era.

The company will inform the CMI Hub in developing technologies that make efficient use of PGMs and embed circularity, applying expertise from its decades of experience across the PGM ecosystem, Johnson Matthey industrial PGM research and strategy manager Margery Ryan stated on LinkedIn.

Global advocacy work by the company also extends to membership of UK government advisory councils and other global organisations.