The Guangzhou Futures Exchange (GFEX) has announced plans to launch the first platinum and palladium futures contracts in China.
As expected, this will allow contracts delivery in forms used by consumers, primarily automakers and other industries, as well as meet platinum investment demand.
According to Chen Xuanchen, GFEX's research and development lead for platinum and palladium futures, "the exchange fills a gap in the Chinese market by providing mechanisms to discover domestic platinum and palladium prices and help businesses hedge price risks."
GFEX contracts are designed to improve the stability and efficiency of the Chinese platinum group metals market. The contract listing dates have not yet been determined by the exchange. The issue of settlement of platinum group metals contracts on a monthly basis is currently being studied, but the option of quarterly contracts is also being considered.
The new GFEX futures will allow makers of platinum jewellery and investment products to hedge price risk, but this in turn could reduce premium they charge clients for platinum products and the discount on buyback.
GFEX, which was created to support China's green transition in 2021, started with silicon futures in 2022, followed by lithium futures the following year.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
