China’s platinum futures exchange debut seen as major boost for South Africa's PGMs

From youtube.com/miningweekly

Physically settled platinum and palladium futures contracts and futures options will commence trading on November 27 on China’s Guangzhou Futures Exchange, which is cracking a world first by taking delivery of sponge, an advance that is highly attractive to industrial and automotive end-users. Up to now, exchanges have only been prepared to take delivery of platinum ingot and bar. Despite being the world’s largest consumer of platinum group metals (PGMs), China has typically been a PGMs price taker, with only its varying levels of imports impacting on international price discovery. Now, the listing of platinum and palladium futures is seen as increasing the influence of China’s future demand expectations on global price discovery. Moreover, the provision of an alternative mechanism to gain exposure to platinum and palladium supports broader liquidity and the overall effect is viewed as being a major boost for South Africa’s world-leading PGMs endowment in that fabricators can register their future production under a 120% bank guarantee and price risk hedging across the supply chain will likely lower buyback discounts.