Edward Sterck: Platinum Price Up 50 Percent YTD — What's Next?
Summary
Market Outlook: The platinum market is experiencing its third consecutive annual deficit, with supply at its lowest in five years, leading to tight market conditions.
Supply Dynamics: Despite a 50% increase in platinum prices, there is no significant supply response from mines due to the long development timelines and the complex economics of poly-metallic mines.
Recycling Limitations: Recycling is more price elastic than mine supply but cannot bridge the substantial supply-demand gap, with a forecasted deficit of 850,000 ounces this year.
Price Performance: Platinum has been the best-performing commodity in the first half of 2025, driven by tight market conditions and high lease rates, indicating a potential need for higher prices to attract more metal into the market.
Above Ground Stocks: Estimated at just under 3 million ounces, these stocks are tight, with additional supply from ETFs and exchange stocks contingent on higher prices.
Tariff Concerns: The potential for tariffs on platinum in the US creates uncertainty, impacting demand dynamics and leading to onshoring of metal.
Demand Drivers: Strong investment demand from China, driven by de-dollarization and gold price dynamics, is boosting platinum bar and coin sales, while jewelry demand shows growth but with caution advised on sustainability.
Industrial and Automotive Demand: Automotive demand remains steady despite tariff risks, while industrial demand sees slight growth, with some negative impacts from facility closures.
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Edward Sturk, director of research at the World Platinum Investment Council. Thank you so much for being here. Great to have you. Well, thank you so much. It's always a pleasure. Really good to be catching up with you and of course as always we are going over the World Platinum Investment Council's latest quarterly report. So this this latest report confirms a third consecutive annual deficit for the market and I believe supply coming in at the lowest level in 5 years. So I thought we could start on the supply side for a change. I was wondering we have the price higher. We've seen a breakout in since we've last spoken really. Is that something we've talked about issues that the miners are having. Is the higher price something that could help to bring supply back online? um to to be honest with you not really. I mean I think the um if you look at it from a cost code perspective and bear in mind that we're not just looking at the platinum price when it comes to the economics of the of the um PGM producers but we've also got to consider penadium roodium nickel copper the minor PGMs gold and all of these uh because these are poly metallic mines the economics depend upon the aggregated price of all of these different metals and um you know the price has improved platinum's gone up You've also seen quite a good bump in terms of roodium prices and actually prices as well. Um but fundamentally all it's really done is moved in rough numbers the market from being say 40% of the cost curve in cash flow negative territory to maybe 10%. And that that's in commodity markets um sort of 101 economics is about where you'd normally expect uh the sort of pricing to be set at. is that 90% intersection between the cost curve and and and the price of any single commodity in this case the basket price. So I don't think we're going to see any meaningful mine supply response at these levels. Uh and it's also worth bearing in mind that these are for the most part deep level underground mines. So even if we had let's say another 50% increase in the basket price, you're still not going to see a supply response over the near to medium term because the just the development time frames for um well for developing the old body and then increasing output are you know they're multi-year. They're not um you can't make these changes in short sort of um sort of half year or monthly kind of um time frames. That's really good context on the mine supply side. I think that helps to understand what's going on in the market. What about what about in terms of recycling? Is that something where you're seeing an uptick with the the price increase? Yeah, so recycling is is definitely much more price elastic than mine suppliers. Um certainly over the the near to to medium term. Um at the same time it's it is a bit limited in terms of you know how much that that that can increase. Um at the end of the day people tend to scrap their old vehicles at a fairly consistent rate and and um spent cathic converters from old scrap vehicles is the main component of recycling supply. Um so there's just a natural limitation on on the pace at which that can occur. If you look back at the period 2019 through 2021, we did see quite a big increase in recycling supply which was led by the fact that you had uh a substantial increase in um palladium and roodium prices and effectively that kind of brought forward quite a lot of recycling. So a car go scrapyard the first thing they do is just cut that catalytic converter off and get that through the recycling system and then the rest of the car they kind of get round to processing later on. I think the um the key point there is that was due to palladium and roodium prices. So realistically from a platinum perspective, yes, we've seen quite a big increase in the platinum price year to date, but it's not the main driver of the economics for those scrap aggregators and recyclers. It's really more of a palladium story, even more so than roodium. Um and so you need a sustained increase in palladium prices to drive a meaningful change there. Um that said, you know, we have faced an increase in our forecast for this year. So recycling is expected to step up a bit, but I think it's important to emphasize that it's it's not possible really for recycling to fill that gap. Fundamental gap between supply and demand, which is expected for this year to sit at about 850,000 ounces. Given the total market is 7.9 million ounces, you know, that's quite substantial deficit to fill and recycling, as I said, can't uh can't bridge that gap. Yeah. Yeah, it is quite substantial as you're saying. and talking a little bit more about the price. So, I mentioned at the beginning of the conversation, it's been on the move since we last spoke back in May. I believe reading the report, it said it was actually the best performing commodity for the first 6 months of 2025, which is quite impressive. Maybe that's changed a little bit now with gold and and silver on the move once again. But I remember when we were talking at that time, you're feeling cautiously optimistic about what was going on with the price. How are you feeling about it at this point? So, you know, I'd say the last I checked, I think it is still the best performing commodity. I I I have to I haven't actually checked today and as you say, gold and silver are on the move. Um, but uh, you know, I think what I would say in terms of where does price sit today and what does that mean and what's the landscape uh, and what does the outlook possibly is that um, in a way it was kind of strange that the price hadn't moved earlier. We saw we're in our third year of substantial market deficits. Those were being satisfied by a draw down effectively from above ground stocks. But from December last year, we saw significant tightness emerge in the market. And that was evidenced by uh high lease rates. So the cost of borrowing metal um went up from pretty close to zero up to somewhere in the in the mid- teens. Um we also saw the London OTC market go into strong backquidation. So both lease rates and that backquidation are very much indicators of tight market conditions. Um and once the price started to move from May onwards um you know that was probably just really a a natural response to the fact that there was obviously a shortage of metal in the prop market. What's interesting is that we've gone up from I don't know roughly at the beginning of this year a starting price of about 950 peaked at about 1450. So quite a substantial move as you said. um and price has sort of settled at around that level 1350 to 1450 for a while now. So it's kind of consolidated but we haven't seen lease rates ease. We haven't seen the backdraidation ease. If anything actually the market conditions have become even tighter. So in a in a in a way it feels a bit like we might even need higher platinum prices in order to attract more metal into the market from above ground stocks in order to try and ease those tight market conditions. I mean, we'll have to wait and see how things play out, but but that's just based upon the fundamentals that we can we can see at the moment. Yeah. Yeah. I remember really for months we've had conversations about the price and and wondering why it wasn't moving yet. So, now that it has, it kind of feels like something we were waiting for. Is there anything more you would say about above ground stocks? Because that seems important to go over as well and something that people should be aware of in terms of the market dynamics. Yes. So I mean our our estimate of above ground stocks is just shy of 3 million ounces. Um so let's call it four four four and a half months maybe five months of annual demand requirements. Um the sort of rule of thumb in commodity markets is that once you get below about 6 months of demand being available in above ground stocks um that's when you begin to feel a bit nervous about the potential for a for a supply squeeze. The um the challenge is that these are only estimates. Uh and um so there's a lot of opacity. Uh there's probably a reasonable degree of uh inaccuracy as well. Um but uh but fundamentally, you know, we know that they're not clear xat. They are they are tight. You can see it as I said earlier in the market conditions. There are other sources of above ground stocks that we don't capture in our estimate. So you've got ETFs and you've also got things like um exchange stocks. So those are the those the the the sort of stocks of metal that are um lodged in bonded warehouses uh to collateralize short positions in in futures markets. Both ETFs and those exchange stocks can be a source of supply. But the reason that we exclude them from our estimates is that fundamentally unlocking that source of supply requires price. So you know ETF holders they they haven't invested in the ETFs for for you know out and out fun. they've they've invested because they're expecting to see some kind of return on that investment and that requires price increase. So for them to to crystallize that uh and liquidate those investments, you need higher prices for exchange stocks. It's a little bit more nuanced. It's not necessarily about absolute uh the absolute price level, excuse me, but it's to do with um you know really if there's a if there's a speculative opportunity in the market um and most as I said those exchange stocks are collateralized against short positions. So really what you're looking at is um some kind of steep contango in the the forward curve. Um, as I mentioned in Europe, we're seeing it in backwardation, but in North America, because of the tariff fears, there is actually a reasonable degree of contango that's built into that forward curve because people think that they might be charged, let's say, a 15 20% tariff on on importing metal in the future, but the and these are not precise numbers, but you maybe the 3-month um future is that a 12% premium. So, it's best to buy that than to risk the 15 to 20% um uh tariff in the future. And that creates an arbitrage opportunity and taking advantage of that from a speculative position requires collateralizing that that short uh position with with platinum. So you know the availability of those exchange stock inventories is entirely contingent upon other factors that are that that you know mean that they may not be necessarily available freely to the market. Very very complex and that is going in a direction of another topic I wanted to talk about which is tariffs. I think that whole situation was pretty in flux the last time we were talking and arguably still pretty in flux right now. But looking over at platinum demand, I believe in the second quarter it was down 22% and this was largely due to dynamics playing out around tariffs. So I was hoping you could go into what the the platinum tariff background is right now, how that's looking to you. So, I mean, I think the short answer is um using a word that you touched on there, complex. We don't really know exactly. I'm not sure that anyone even in the White House possibly knows what's going to happen with tariffs. But but as things stand at the moment, we've seen this kind of eb and flow of tariff fears where um you know when when after um President Trump was elected but before his inauguration, he started talking about tariffs, it became increasingly clear that they were going to be an important part of this presidency in terms of policy setting and their view of economics. And so that kind of emerged from December last year and that's really when we began to see those lease rates um kick up and with the the onset of those tariff concerns you saw quite significant efforts to onshore metal into the US. Now post commerce liberation day when it uh was initially announced that uh platinum and other critical minerals weren't going to be tariffed um we saw those fears ease. So the kind of onuring process reversed to a degree. We saw metal flow out of exchange stocks possibly flow out of the US back to um a combination of Europe and China. And then suddenly we had these kind of copper tariffs that were announced and I think the economic rationale behind those copper tariffs are quite hard to unpick from a rational perspective. Uh and so that then kind of reignited concerns that other metals including platinum might be subject to tariffs. And so we saw the whole process reverse more on shoring uh and um sort of metal accumulation. And then you add to that there's the sort of growing ideological disconnect between the Trump administration and the South African government. Again, it's pretty hard to really see what the true motivation behind that is, but given that the uh the current US administration has shown that is willing to use tariffs as uh a kind of stick if you like for for enacting foreign policy, you kind of come back to this sort of whole situation where there's a non-zero chance of platinum being subject to subject to tariffs in the US. And so, you know, again, there's this kind of motivation to onshore metal and and and so on. So, that's broadly where we stand at the moment. Um, how's that going to unfold through the rest of the year? It's pretty hard to know. I I certainly don't have uh a strong opinion on that. And um yeah, like I said, I'm not sure anyone particularly does. I am also not sure if anybody really can truly say what's going to be coming. So, thank you though for for trying to unpack that. And also on the demand side, I wanted to touch on barring coin demand. It looks like it was pretty strong coming out of China. So I was hoping you could talk a little bit about drivers there and and what's happening. Yeah. So China's been the big driver of that. Um and um you know I think a lot of it comes back to gold. You know you've kind of got this deep dollarization um sort of action that's going on at the moment. Um uh and so that's translating into pretty strong consumer demand for for gold as an investment product. uh and to a degree platinum is a is a beneficiary of that. You know, I think the kind of uh perception in China of of price direction risk has been gold's reached a level where they see more downside risk and they see in contrast upside potential for platinum and so it's translating into really robust demand for platinum investment products. And I think one of the interesting things to highlight here is that these are smaller bars and coins primarily. So, we're not talking about high netw worth individuals or institutional investment. This is true kind of um man or woman on the street uh type retail consumer investment demand for you relatively small small bars and uh and coins. Really interesting. And is it a similar situation going on with platinum jewelry in terms of relation to gold where we've got higher gold price? Maybe people are looking over at at platinum jewelry. and also curious on the jewelry side where where that demand is coming from. So I'd say in contrast to the investment product demand in China, I'd be a little bit cautious in suggesting that we see the kind of momentum that that kind of built over the the first half of the year being sustained through the second half of the year in terms of platinum jewelry demand. And the reason I say that is that if you look at the second quarter, um, Chinese demand doubled quarter on quarter. And that to me is just it's a little bit too big of a step up. And I'm and I just I worry about everyone getting too excited about it and thinking where we're off to the races. So a small note of caution, we're definitely going to see a really significant year-on-year increase in jewelry demand in China. It's probably not going to be a doubling, though. you know, it's going to be sort of maybe uh double digits somewhere, but but in terms of percentage increase. Um, but yeah, don't get too excited about it so far. And part of the reason is what's driving that increase has been fabrication funded by wholesalers and they're they're they're promoting platinum because they've seen a huge drop in their gold jewelry sales. So, they're trying to find an alternative to capture or recapture that customer um buying interest and revenues and so on. We haven't got the data yet. I'm not saying that it isn't translating into true consumer buying. We haven't got the data to prove that's the case. We do with platinum investment products. We don't do jewelry. So, you know, I think there's there is a strong outlook for jewelry. It's definitely on the up. Uh but I'd be a bit cautious again to reiterate about the magnitude of that increase in the world. Exchina. Um we are just seeing consistent growth. So, um, it's been, if I, if I've got my numbers numbers correctly, I think about 3 and a half% cargo consistently since 2014. Um, and certainly in markets like Japan, Europe, and North America where you've got a a big white uh, white gold component to the jewelry market, white gold was produced as a lower cost alternative alloy to platinum. It's only 75% pure. And we're we we're seeing based upon our own market research, we can see that at the retail level, uh platinum is being now being priced at at a discount to white gold. And I think most consumers given the choice between one or the other in those markets are going to go for platinum. Almost totally pure uh and um unlike white gold which is really white because it's actually um got a rodium coating which wears away over time. So it does kind of go yellow over um you know a few years of use. Platinum remains white. So it's it's fundamentally the better choice as as a jewelry metal in that uh if you want a white white white white metal appearance. Anything further you would add on the demand side. I don't think we've covered the the auto or industrial segments yet. Um in terms of automotive demand um there's not this quarter there's not really a huge amount to actually say that of note except to um to comment that uh actually it's arguably been more robust than we'd have anticipated given the tariff risks and the negative impact uh that those tariffs have on the ability to produce vehicles in let's say Europe and and export them to the US. So auto automotive demand um pretty steady uh and that's probably better than expected for right now. You know, I think going forwards, if you look out beyond this year, um, higher for longer automated demand has been our kind of perspective for a while and that's on a a slower than, yeah, a slower kind of electrification of the drivetrain, which has just been an ongoing trend. And, you know, I think that's that's something that's likely to persist. In terms of industrial demand, um, this year we've seen uh some glass production facilities close, one particularly big one in Japan. um that is a ne negative on demand because the metal that's in that facility uh has been liquidated and sold into the market. I mean interestingly the timing of that would have been would have pretty much coincided with uh the the increase in the platinum price in the second quarter. So clearly it wasn't enough to really offset that that uh that demand picture overall. Um but apart from that, the rest of the the rest of the um the industrial space is just growing um below single digits fairly consistently. All right. Well, well, thank you for going into those areas as well. And I'll let you go unless you had any final thoughts that you would leave investors with right now, maybe points that you're watching closely as we head into the final quarter of the year. Yeah, I think there's probably a couple of things to impart. So firstly um you know if we think about the supply picture the um it probably is going to ease a little bit towards the year end. So we see um the mine supply which is seasonally biased towards the end of the year anyway. This year that was particularly um accentuated by flooding in South Africa during the first quarter of the year. So we do expect a bit of an increase in mine supply towards the end of this year. But at the same time you if you think about we have seen some profit taken from ETFs. we have seen some exchange stock outflows. Um I mean just to reiterate you know the price has gone up by um 50% or so and yet we still haven't seen any easing of those lease rates or the strong backidation in the forward market. So you know fundamentally at the moment it just appears that the platinum price at current levels isn't sufficient to track to attract enough metal into the market to to really use those uh those market conditions. Okay. Well, it's it's definitely an interesting set of circumstances. It'll be exciting to see what comes in the last period of the year. Thank you so much for now for for coming on to talk. I think this was very educational as always. Save the Thanksgiving time meal. Of course. And once again, I'm Charlotte Mloud with investingnews.com and this is Edward Stark with the World Platinum Investment Council. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]
Edward Sterck: Platinum Price Up 50 Percent YTD — What's Next?
Summary
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Edward Sturk, director of research at the World Platinum Investment Council. Thank you so much for being here. Great to have you. Well, thank you so much. It's always a pleasure. Really good to be catching up with you and of course as always we are going over the World Platinum Investment Council's latest quarterly report. So this this latest report confirms a third consecutive annual deficit for the market and I believe supply coming in at the lowest level in 5 years. So I thought we could start on the supply side for a change. I was wondering we have the price higher. We've seen a breakout in since we've last spoken really. Is that something we've talked about issues that the miners are having. Is the higher price something that could help to bring supply back online? um to to be honest with you not really. I mean I think the um if you look at it from a cost code perspective and bear in mind that we're not just looking at the platinum price when it comes to the economics of the of the um PGM producers but we've also got to consider penadium roodium nickel copper the minor PGMs gold and all of these uh because these are poly metallic mines the economics depend upon the aggregated price of all of these different metals and um you know the price has improved platinum's gone up You've also seen quite a good bump in terms of roodium prices and actually prices as well. Um but fundamentally all it's really done is moved in rough numbers the market from being say 40% of the cost curve in cash flow negative territory to maybe 10%. And that that's in commodity markets um sort of 101 economics is about where you'd normally expect uh the sort of pricing to be set at. is that 90% intersection between the cost curve and and and the price of any single commodity in this case the basket price. So I don't think we're going to see any meaningful mine supply response at these levels. Uh and it's also worth bearing in mind that these are for the most part deep level underground mines. So even if we had let's say another 50% increase in the basket price, you're still not going to see a supply response over the near to medium term because the just the development time frames for um well for developing the old body and then increasing output are you know they're multi-year. They're not um you can't make these changes in short sort of um sort of half year or monthly kind of um time frames. That's really good context on the mine supply side. I think that helps to understand what's going on in the market. What about what about in terms of recycling? Is that something where you're seeing an uptick with the the price increase? Yeah, so recycling is is definitely much more price elastic than mine suppliers. Um certainly over the the near to to medium term. Um at the same time it's it is a bit limited in terms of you know how much that that that can increase. Um at the end of the day people tend to scrap their old vehicles at a fairly consistent rate and and um spent cathic converters from old scrap vehicles is the main component of recycling supply. Um so there's just a natural limitation on on the pace at which that can occur. If you look back at the period 2019 through 2021, we did see quite a big increase in recycling supply which was led by the fact that you had uh a substantial increase in um palladium and roodium prices and effectively that kind of brought forward quite a lot of recycling. So a car go scrapyard the first thing they do is just cut that catalytic converter off and get that through the recycling system and then the rest of the car they kind of get round to processing later on. I think the um the key point there is that was due to palladium and roodium prices. So realistically from a platinum perspective, yes, we've seen quite a big increase in the platinum price year to date, but it's not the main driver of the economics for those scrap aggregators and recyclers. It's really more of a palladium story, even more so than roodium. Um and so you need a sustained increase in palladium prices to drive a meaningful change there. Um that said, you know, we have faced an increase in our forecast for this year. So recycling is expected to step up a bit, but I think it's important to emphasize that it's it's not possible really for recycling to fill that gap. Fundamental gap between supply and demand, which is expected for this year to sit at about 850,000 ounces. Given the total market is 7.9 million ounces, you know, that's quite substantial deficit to fill and recycling, as I said, can't uh can't bridge that gap. Yeah. Yeah, it is quite substantial as you're saying. and talking a little bit more about the price. So, I mentioned at the beginning of the conversation, it's been on the move since we last spoke back in May. I believe reading the report, it said it was actually the best performing commodity for the first 6 months of 2025, which is quite impressive. Maybe that's changed a little bit now with gold and and silver on the move once again. But I remember when we were talking at that time, you're feeling cautiously optimistic about what was going on with the price. How are you feeling about it at this point? So, you know, I'd say the last I checked, I think it is still the best performing commodity. I I I have to I haven't actually checked today and as you say, gold and silver are on the move. Um, but uh, you know, I think what I would say in terms of where does price sit today and what does that mean and what's the landscape uh, and what does the outlook possibly is that um, in a way it was kind of strange that the price hadn't moved earlier. We saw we're in our third year of substantial market deficits. Those were being satisfied by a draw down effectively from above ground stocks. But from December last year, we saw significant tightness emerge in the market. And that was evidenced by uh high lease rates. So the cost of borrowing metal um went up from pretty close to zero up to somewhere in the in the mid- teens. Um we also saw the London OTC market go into strong backquidation. So both lease rates and that backquidation are very much indicators of tight market conditions. Um and once the price started to move from May onwards um you know that was probably just really a a natural response to the fact that there was obviously a shortage of metal in the prop market. What's interesting is that we've gone up from I don't know roughly at the beginning of this year a starting price of about 950 peaked at about 1450. So quite a substantial move as you said. um and price has sort of settled at around that level 1350 to 1450 for a while now. So it's kind of consolidated but we haven't seen lease rates ease. We haven't seen the backdraidation ease. If anything actually the market conditions have become even tighter. So in a in a in a way it feels a bit like we might even need higher platinum prices in order to attract more metal into the market from above ground stocks in order to try and ease those tight market conditions. I mean, we'll have to wait and see how things play out, but but that's just based upon the fundamentals that we can we can see at the moment. Yeah. Yeah. I remember really for months we've had conversations about the price and and wondering why it wasn't moving yet. So, now that it has, it kind of feels like something we were waiting for. Is there anything more you would say about above ground stocks? Because that seems important to go over as well and something that people should be aware of in terms of the market dynamics. Yes. So I mean our our estimate of above ground stocks is just shy of 3 million ounces. Um so let's call it four four four and a half months maybe five months of annual demand requirements. Um the sort of rule of thumb in commodity markets is that once you get below about 6 months of demand being available in above ground stocks um that's when you begin to feel a bit nervous about the potential for a for a supply squeeze. The um the challenge is that these are only estimates. Uh and um so there's a lot of opacity. Uh there's probably a reasonable degree of uh inaccuracy as well. Um but uh but fundamentally, you know, we know that they're not clear xat. They are they are tight. You can see it as I said earlier in the market conditions. There are other sources of above ground stocks that we don't capture in our estimate. So you've got ETFs and you've also got things like um exchange stocks. So those are the those the the the sort of stocks of metal that are um lodged in bonded warehouses uh to collateralize short positions in in futures markets. Both ETFs and those exchange stocks can be a source of supply. But the reason that we exclude them from our estimates is that fundamentally unlocking that source of supply requires price. So you know ETF holders they they haven't invested in the ETFs for for you know out and out fun. they've they've invested because they're expecting to see some kind of return on that investment and that requires price increase. So for them to to crystallize that uh and liquidate those investments, you need higher prices for exchange stocks. It's a little bit more nuanced. It's not necessarily about absolute uh the absolute price level, excuse me, but it's to do with um you know really if there's a if there's a speculative opportunity in the market um and most as I said those exchange stocks are collateralized against short positions. So really what you're looking at is um some kind of steep contango in the the forward curve. Um, as I mentioned in Europe, we're seeing it in backwardation, but in North America, because of the tariff fears, there is actually a reasonable degree of contango that's built into that forward curve because people think that they might be charged, let's say, a 15 20% tariff on on importing metal in the future, but the and these are not precise numbers, but you maybe the 3-month um future is that a 12% premium. So, it's best to buy that than to risk the 15 to 20% um uh tariff in the future. And that creates an arbitrage opportunity and taking advantage of that from a speculative position requires collateralizing that that short uh position with with platinum. So you know the availability of those exchange stock inventories is entirely contingent upon other factors that are that that you know mean that they may not be necessarily available freely to the market. Very very complex and that is going in a direction of another topic I wanted to talk about which is tariffs. I think that whole situation was pretty in flux the last time we were talking and arguably still pretty in flux right now. But looking over at platinum demand, I believe in the second quarter it was down 22% and this was largely due to dynamics playing out around tariffs. So I was hoping you could go into what the the platinum tariff background is right now, how that's looking to you. So, I mean, I think the short answer is um using a word that you touched on there, complex. We don't really know exactly. I'm not sure that anyone even in the White House possibly knows what's going to happen with tariffs. But but as things stand at the moment, we've seen this kind of eb and flow of tariff fears where um you know when when after um President Trump was elected but before his inauguration, he started talking about tariffs, it became increasingly clear that they were going to be an important part of this presidency in terms of policy setting and their view of economics. And so that kind of emerged from December last year and that's really when we began to see those lease rates um kick up and with the the onset of those tariff concerns you saw quite significant efforts to onshore metal into the US. Now post commerce liberation day when it uh was initially announced that uh platinum and other critical minerals weren't going to be tariffed um we saw those fears ease. So the kind of onuring process reversed to a degree. We saw metal flow out of exchange stocks possibly flow out of the US back to um a combination of Europe and China. And then suddenly we had these kind of copper tariffs that were announced and I think the economic rationale behind those copper tariffs are quite hard to unpick from a rational perspective. Uh and so that then kind of reignited concerns that other metals including platinum might be subject to tariffs. And so we saw the whole process reverse more on shoring uh and um sort of metal accumulation. And then you add to that there's the sort of growing ideological disconnect between the Trump administration and the South African government. Again, it's pretty hard to really see what the true motivation behind that is, but given that the uh the current US administration has shown that is willing to use tariffs as uh a kind of stick if you like for for enacting foreign policy, you kind of come back to this sort of whole situation where there's a non-zero chance of platinum being subject to subject to tariffs in the US. And so, you know, again, there's this kind of motivation to onshore metal and and and so on. So, that's broadly where we stand at the moment. Um, how's that going to unfold through the rest of the year? It's pretty hard to know. I I certainly don't have uh a strong opinion on that. And um yeah, like I said, I'm not sure anyone particularly does. I am also not sure if anybody really can truly say what's going to be coming. So, thank you though for for trying to unpack that. And also on the demand side, I wanted to touch on barring coin demand. It looks like it was pretty strong coming out of China. So I was hoping you could talk a little bit about drivers there and and what's happening. Yeah. So China's been the big driver of that. Um and um you know I think a lot of it comes back to gold. You know you've kind of got this deep dollarization um sort of action that's going on at the moment. Um uh and so that's translating into pretty strong consumer demand for for gold as an investment product. uh and to a degree platinum is a is a beneficiary of that. You know, I think the kind of uh perception in China of of price direction risk has been gold's reached a level where they see more downside risk and they see in contrast upside potential for platinum and so it's translating into really robust demand for platinum investment products. And I think one of the interesting things to highlight here is that these are smaller bars and coins primarily. So, we're not talking about high netw worth individuals or institutional investment. This is true kind of um man or woman on the street uh type retail consumer investment demand for you relatively small small bars and uh and coins. Really interesting. And is it a similar situation going on with platinum jewelry in terms of relation to gold where we've got higher gold price? Maybe people are looking over at at platinum jewelry. and also curious on the jewelry side where where that demand is coming from. So I'd say in contrast to the investment product demand in China, I'd be a little bit cautious in suggesting that we see the kind of momentum that that kind of built over the the first half of the year being sustained through the second half of the year in terms of platinum jewelry demand. And the reason I say that is that if you look at the second quarter, um, Chinese demand doubled quarter on quarter. And that to me is just it's a little bit too big of a step up. And I'm and I just I worry about everyone getting too excited about it and thinking where we're off to the races. So a small note of caution, we're definitely going to see a really significant year-on-year increase in jewelry demand in China. It's probably not going to be a doubling, though. you know, it's going to be sort of maybe uh double digits somewhere, but but in terms of percentage increase. Um, but yeah, don't get too excited about it so far. And part of the reason is what's driving that increase has been fabrication funded by wholesalers and they're they're they're promoting platinum because they've seen a huge drop in their gold jewelry sales. So, they're trying to find an alternative to capture or recapture that customer um buying interest and revenues and so on. We haven't got the data yet. I'm not saying that it isn't translating into true consumer buying. We haven't got the data to prove that's the case. We do with platinum investment products. We don't do jewelry. So, you know, I think there's there is a strong outlook for jewelry. It's definitely on the up. Uh but I'd be a bit cautious again to reiterate about the magnitude of that increase in the world. Exchina. Um we are just seeing consistent growth. So, um, it's been, if I, if I've got my numbers numbers correctly, I think about 3 and a half% cargo consistently since 2014. Um, and certainly in markets like Japan, Europe, and North America where you've got a a big white uh, white gold component to the jewelry market, white gold was produced as a lower cost alternative alloy to platinum. It's only 75% pure. And we're we we're seeing based upon our own market research, we can see that at the retail level, uh platinum is being now being priced at at a discount to white gold. And I think most consumers given the choice between one or the other in those markets are going to go for platinum. Almost totally pure uh and um unlike white gold which is really white because it's actually um got a rodium coating which wears away over time. So it does kind of go yellow over um you know a few years of use. Platinum remains white. So it's it's fundamentally the better choice as as a jewelry metal in that uh if you want a white white white white metal appearance. Anything further you would add on the demand side. I don't think we've covered the the auto or industrial segments yet. Um in terms of automotive demand um there's not this quarter there's not really a huge amount to actually say that of note except to um to comment that uh actually it's arguably been more robust than we'd have anticipated given the tariff risks and the negative impact uh that those tariffs have on the ability to produce vehicles in let's say Europe and and export them to the US. So auto automotive demand um pretty steady uh and that's probably better than expected for right now. You know, I think going forwards, if you look out beyond this year, um, higher for longer automated demand has been our kind of perspective for a while and that's on a a slower than, yeah, a slower kind of electrification of the drivetrain, which has just been an ongoing trend. And, you know, I think that's that's something that's likely to persist. In terms of industrial demand, um, this year we've seen uh some glass production facilities close, one particularly big one in Japan. um that is a ne negative on demand because the metal that's in that facility uh has been liquidated and sold into the market. I mean interestingly the timing of that would have been would have pretty much coincided with uh the the increase in the platinum price in the second quarter. So clearly it wasn't enough to really offset that that uh that demand picture overall. Um but apart from that, the rest of the the rest of the um the industrial space is just growing um below single digits fairly consistently. All right. Well, well, thank you for going into those areas as well. And I'll let you go unless you had any final thoughts that you would leave investors with right now, maybe points that you're watching closely as we head into the final quarter of the year. Yeah, I think there's probably a couple of things to impart. So firstly um you know if we think about the supply picture the um it probably is going to ease a little bit towards the year end. So we see um the mine supply which is seasonally biased towards the end of the year anyway. This year that was particularly um accentuated by flooding in South Africa during the first quarter of the year. So we do expect a bit of an increase in mine supply towards the end of this year. But at the same time you if you think about we have seen some profit taken from ETFs. we have seen some exchange stock outflows. Um I mean just to reiterate you know the price has gone up by um 50% or so and yet we still haven't seen any easing of those lease rates or the strong backidation in the forward market. So you know fundamentally at the moment it just appears that the platinum price at current levels isn't sufficient to track to attract enough metal into the market to to really use those uh those market conditions. Okay. Well, it's it's definitely an interesting set of circumstances. It'll be exciting to see what comes in the last period of the year. Thank you so much for now for for coming on to talk. I think this was very educational as always. Save the Thanksgiving time meal. Of course. And once again, I'm Charlotte Mloud with investingnews.com and this is Edward Stark with the World Platinum Investment Council. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]