A platinum renaissance?

Platinum’s price has slowly been rising, with some suggesting it may start tracking that of gold more closely. Others caution that investors should maintain a measured, long-term view on platinum group metals.

- David McKay

Arebrand in recent years of platinum companies into platinum group metals (PGMs) producers was to acknowledge the increasing role played by palladium, and more recently rhodium, in the performance of the sector. For instance, the two metals comprised half of Impala Platinum’s (Implats’) revenue in its 2020 financial year, even though the company is predominantly a platinum producer.

Yet, there’s growing evidence that the much-ignored platinum is finally back on investors’ radars. “A lot of interest that we’ve seen in platinum, whether it’s through futures positioning or whether it’s through ETF (exchange-traded funds) holdings has been very much based on the fact platinum continues to be undervalued,” said Suki Cooper, executive director of precious metals research at Standard Chartered Bank in New York at the Joburg Indaba PGM conference earlier this month.

The metal has started to slowly creep up in price. At the time of writing, the dollar platinum price is 14% higher over the last 90 days. It’s still outstripped by palladium pricing, which is nearly a fifth higher over the same timeframe, but in the past platinum has languished even as prices for its sister metals surged.

“In the near term, the recovery certainly does look fragile but longer-term – whether it’s fuel cell development, whether it’s a fact that demand has perhaps reached the lowest point of the cycle – we are starting to see more optimism,” said Cooper.