The third week of May sees an annual event in London known as “Platinum
Week” when many participants from the platinum industry gather for a series
of seminars and networking events organized by the London Platinum and Palladium Market (LPPM)
and a number of precious metals consultancies.
Platinum Week is held in May as it marks the anniversary
of the first “London Platinum Quotation“ which began in May 1973, and which
went on to become the London Platinum Fixing, which subsequently was replaced
by the current LBMA
Platinum Price auctions.
Publishers of platinum focused investment and research material also tend
to schedule the publications of their latest reports to coincide with
Platinum Week, for example the First Quarter 2019 edition of the World
Platinum Investment Council’s Platinum
Quarterly, Johnson Matthey’s May 2019 edition of its ‘PGM
Market Report’, and the Metals Focus consultancy’s ‘Platinum & Palladium Focus‘
for 2019. The week also sees extended
coverage of platinum news by the major financial media outlets such as Reuters
and Bloomberg.
Although primarily a networking and deal-making event, Platinum Week also
helps keep platinum on the radar of the investment world, and in addition to
the heads of South African platinum mining companies such as Lonmin, Anglo American Platinum, Implats and Sibanye-Stillwater, there are
many investment platinum refineries and mints in attendance, as well as
banks, ETF providers, hedge funds, and other buy-side investment
institutions.
While many have heard of the London
Bullion Market Association (LBMA) and its Good Delivery List for gold and
silver refiners, the London Platinum and
Palladium Market (LPPM) is a lessor known but similar organization for
the platinum and palladium markets globally, and it has its own Good Delivery List of the world’s
top platinum refiners such as Heraeus, Valcambi, and Argor-Heraeus.
Previously operating as a standalone
industry group, the LPPM is now more closely aligned with the LBMA,
and is administered by the same LBMA / LPPM executive team in London, and has
the same annual LBMA / LPPM conference, which is later this year in Shenzhen.
Platinum has different supply and demand drivers to those of gold and
silver which means that the price of platinum will perform differently to the
prices of gold and silver over time. This also means that the price
correlation of platinum versus other precious metals and versus other asset
classes provides diversification benefits when platinum is included in
diversified investment portfolios.
Platinum mining supply only comes from a few countries, led by South Africa
and to a lesser extent Russia, Zimbabwe, the US and Canada. The demand
drivers of platinum are also very different to those of silver and
gold and consist of demand from the autocatalyst sector (above 40% of
demand), platinum jewllery demand (30%), industrial demand for platinum
(20%), and physical investment in platinum – which includes platinum bars and
platinum coins, ETF holdings and commodity exchange warehouse stocks (less
than 10% of overall demand).
As an investment
precious metal, platinum gets less attention than gold and silver, but
this is gradually changing since there are now a large range of platinum bullion bars and
platinum bullion coins available on the market, produced by the world’s
leading precious metals mints and refineries.
Platinum
bullion coins produced by the world’s leading precious metals mints
Investment grade platinum bars available on the market are produced in a
variety of popular weights such as 1 kg, 500 grams, 100 grams and 1 oz
and include those from the German
Heraeus refinery and Swiss refineries Valcambi
and Argor-Heraeus.
All the leading precious metals mints now produce high purity platinum
bullion coins including the Canadian
platinum Maple Leaf from the Royal Canadian Mint (RCM), the platinum
bullion Philharmonic coin from the Austrian Mint, the platinum
Britannia bullion coin from the Royal Mint, American
platinum Eagles from the US Mint, and the well-known platinum
Platypus coin from the Perth Mint.
As with investment gold and silver bars and coins, investment grade
platinum bars and platinum coins purchased in Singapore are also exempt from Singapore’s Goods and
Services Tax (GST) as long as the bars and coins have a platinum purity
of 99% or higher and the bars are fabricated by refineries on the LPPM Good
Delivery list.
Given that platinum coins from the above mints all have a platinum purity
of 99.95% and given that platinum bars all have 99.95% purity and are
produced by platinum refineries on the LPPM Good Delivery list for platinum,
all of these platinum investment products are exempt from Singapore’s GST.
Themes discussed during this year’s Platinum Week will undoubtedly include
the price outlook for platinum compared to palladium, how the worldwide auto
sector’s changing demand patterns for platinum will affect the platinum price
going forward, how mine supply will affect platinum’s supply-demand surplus,
and how demand patterns are evolving between platinum-backed ETF products and
physical platinum bar and coin investment demand.
