Platinum Jul '22 (PLN22)

Description

Platinum (atomic symbol Pt) is a relatively rare, chemically inert metallic element that is more valuable than gold. Platinum is a grayish-white metal with a high melting point, is malleable and ductile, and has a high electrical resistance. Chemically, platinum is relatively inert and resists attack by air, water, single acids, and ordinary reagents. Platinum is the most important of the six-metal group, which also includes ruthenium, rhodium, palladium, osmium, and iridium. The word "platinum" is derived from the Spanish word platina, meaning silver.

Platinum is one of the world's rarest metals, with new mine production totaling only about 5 million troy ounces a year. All the platinum mined to date would fit in the average-sized living room. Platinum is mined worldwide, with supplies concentrated in South Africa. South Africa accounts for nearly 80% of the world's supply, followed by Russia and North America.

Because platinum will never tarnish, lose its rich white luster, or even wear down after many years, it is prized by the jewelry industry. The international jewelry industry is a major consumer of platinum, accounting for more than one-quarter of total demand. In Europe and the US, the normal purity of platinum is 95%. Ten tons of ore must be mined, and a five-month process is needed to produce one ounce of pure platinum.

The second major consumer sector for platinum is autocatalysts, with 21% of total platinum demand. Catalysts in autos are used to convert most emissions into less harmful carbon dioxide, nitrogen, and water vapor. Platinum is also used in the production of hard disk drive coatings, fiber-optic cables, infrared detectors, fertilizers, explosives, petrol additives, platinum-tipped spark plugs, glassmaking equipment, biodegradable elements for household detergents, dental restorations, and anti-cancer drugs.

Palladium (atomic symbol Pd) is very similar to platinum and is part of the same general metals group. Palladium is mined with platinum, but it is somewhat more common because it is also a byproduct of nickel mining. The primary use of palladium is in automotive catalysts, which account for about 63% of total palladium demand. Other uses for palladium include electronic equipment (21%), dental alloys (12%), and jewelry (4%).

Rhodium (atomic symbol Rh), another member of the platinum group, is also used in the automotive industry for pollution-control devices. To some extent, palladium has replaced rhodium. Iridium (atomic symbol Ir) is used as a catalyst and in some autocatalysts. Iridium and ruthenium (atomic symbol Ru) are used in the production of polyvinyl chloride. As the prices of these metals change, there is some substitution. Therefore, platinum's relative strength to palladium should lead to palladium's substitution for platinum in catalytic converters.

Platinum futures and options, and palladium futures are traded at the CME Group. Platinum and palladium futures are traded on the Tokyo Commodity Exchange (TOCOM). The CME platinum futures contract calls for the delivery of 50 troy ounces of platinum (0.9995 fineness), and it trades in US dollars and cents per troy ounce. The CME palladium futures contract calls for the delivery of 50 troy ounces of palladium (0.9995 fineness), and the contract is priced in US dollars and cents per troy ounce.

Prices - CME platinum futures prices (Barchart.com symbol PL) on the nearest-futures chart in 2025 closed the year up +128% at $2,034.50 per troy ounce. CME palladium futures prices (Barchart.com symbol PA) on the nearest-futures chart in 2025 closed the year up by +80.4% at $1,629.20 per troy ounce.

Supply - World mine production of platinum in 2025 fell by -5.0% yr/yr to 170,000 kilograms and remained well below the 2006 record high of 218,000 kilograms. South Africa was the world's largest producer of platinum in 2025 by far (accounting for 70.6% of global production), followed by Russia (11.8%), Zimbabwe (10.6%), and Canada (2.9%). World mine production of palladium in 2025 was down by -12.4% at 190,000 kilograms. The world's largest palladium producers in 2025 were Russia (44.2% of global production), South Africa (36.8%), Canada (8.4%), Zimbabwe (7.9%), and the US (3.3%). World production of platinum group metals other than platinum and palladium in 2023 rose by +1.6% yr/yr to 59,660 kilograms, below the 2005 record high of 77,700 kilograms.

US mine production of platinum in 2025 fell by -40.2% yr/yr to 1,800 kilograms, below the record high of 4,390 kilograms posted in 2002. US mine production of palladium in 2025 fell by -39.2% yr/yr to 6,200 kilograms, below the record high of 14,800 kilograms posted in 2002.

Trade - US imports of refined platinum and palladium in 2025 rose by +70.9% yr/yr to 371,200 kilograms. US exports of refined platinum and palladium in 2025 fell by -10.0% yr/yr to 59,340 kilograms. The US relied on imports for 89% of its platinum and palladium consumption in 2025.

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