China to launch its first platinum, palladium futures contracts
- It will allow delivery against contracts in forms used by consumers, like carmakers and other industrial sectors, while meeting platinum investment demand as well
The Guangzhou Futures Exchange (GFEX) said on Tuesday it plans to launch its first platinum and palladium futures contracts in China, the world’s second-largest economy, to offer a domestic price-hedging mechanism.
The GFEX will be the first exchange to allow delivery against its contracts of platinum and palladium in a form used by the main consumers, including carmakers and other industrial sectors, and the contracts may also support platinum investment demand in China.
“Our exchange fills a gap in the Chinese market, providing the mechanisms to discover the domestic prices of platinum and palladium in China and help businesses hedge price risk,” Chen Xuanchen, GFEX’s R&D lead for platinum and palladium futures, was quoted as saying in the World Platinum Investment Council (WPIC) statement.
GFEX’s contracts will enhance the stability and efficiency of the Chinese platinum group metals (PGMs) market, said Trevor Raymond, chief executive at the WPIC, whose members are major Western platinum producers.
GFEX’s Chen told Reuters the exchange has not yet finalised a listing date for the contract.
The GFEX, which was established to support China’s green transition in 2021, started with silicon futures in 2022 and then launched lithium futures in 2023.