Two sessions to observe | build domestic platinum group metal strategic reserve is urgently needed

"Hydrogen energy" has become a hot topic in this year's two sessions. Several deputies to the National People's Congress and members of the Chinese People's Political Consultative Conference (CPPCC) submitted proposals related to the hydrogen energy goal at this year's two sessions. On March 23, 2022, the National Development and Reform Commission and the National Energy Administration issued the Medium and Long-Term Plan for the Development of Hydrogen Energy Industry (2021-2035), which defined the strategic positioning of hydrogen energy in China's low-carbon transition and drew a blueprint for the medium and long-term development of hydrogen energy.

As an important catalyst for the development of the hydrogen energy industry, platinum in the platinum group metals (platinum, palladium, rhodium, iridium, ruthenium, osmium) is the only metal across the four fields of hydrogen production, hydrogen storage, hydrogen transport, hydrogen use, providing clean energy and efficient solutions. For example, platinum and iridium in proton exchange membrane (PEM) applications can not only catalyze the reaction of hydrogen to generate electricity, but also use renewable energy to electrolyze water to produce hydrogen (green hydrogen) in this reverse reaction. In the future, with the implementation of national industrial support policies, the extensive application of hydrogen fuel cells will inevitably expand the demand for platinum catalysts.

"We will vigorously develop hydrogen energy, promote the application of hydrogen trains, cars and electric vehicles on the Qinghai-Tibet Plateau, and help build a national and international ecological plateau." Said Wang Kun, a member of the CPPCC National Committee and chairman of Qinghai Provincial Committee of the Peasant Labor Party. According to the assessment of foreign research institutions, if the global market share of hydrogen fuel cell vehicles is 6%, it will need about 110 tons of platinum every year, accounting for nearly 45% of the annual global platinum supply in 2022 (estimated 242 tons). Under the EU's hydrogen strategy, which aims to build 40,000 megawatts of renewable hydrogen production capacity from electrolytic water (green hydrogen) by 2030, the global green hydrogen capacity ceiling is estimated to be five times that, or 200,000 megawatts. Based on this estimate, assuming a platinum capacity of 0.13 g/kW, the cumulative additional platinum demand for 200,000 MW electrolytic cell will reach 50 tons.

These new platinum-group metals demand will certainly have a significant impact on the future global market supply and demand relations. Especially for China, which is poor in platinum group mineral resources, the rapid development of hydrogen energy industry needs the long-term supply guarantee of platinum resources. China's annual output of mineral platinum and palladium is very small, but it is the world's largest platinum and palladium consumption country, so most of the domestic platinum and palladium supply depends on imports, the rest depends on recycling. Based on the changes in the international political and economic situation and the long-term guarantee of platinum and palladium supply, the industry calls for accelerating the development of the domestic platinum group metal market and increasing domestic reserves through multiple channels.

One is to build a national/industrial strategic reserve. The state should include platinum group metals into important strategic reserves as soon as possible. Relevant departments should study the scientific and technological application prospects of platinum group metals (hydrogen energy, fuel cell, materials, environmental protection and other industries) and assess future demand, and encourage and support the joint establishment of platinum and palladium fund by hydrogen energy and fuel cell industries to establish reserves for future demand.

Second, we will improve the domestic trading market infrastructure. On the basis of understanding the domestic platinum and palladium industry and market demand, the domestic trading venues should supplement and improve the exchange spot trading varieties of platinum and palladium market. To accelerate the launch of platinum and palladium futures in Guangzhou Futures Exchange to provide hedging and price discovery tools for industrial enterprises of platinum group metals.

Third, optimize the industrial policy of platinum group metals recycling. National tax and environmental policies should support the recovery of platinum group metals and provide tax and environmental policies conducive to the "inner cycle" mechanism of platinum and palladium. For example, the exchange or over-the-counter trading of platinum should be exempted from 13% value-added tax on platinum investment products like other major trading markets such as London, and relevant and convenient approval procedures should be provided for the recovery and transportation of platinum group metals resources, rather than directly listed in the hazardous waste list, so as to improve the efficiency of secondary resource recycling and utilization of platinum group metals.

After two years of substantial market surplus, the platinum market is expected to shift to a shortage in 2023, driven by supply constraints and strong demand growth in automotive, industrial applications and investment sectors, according to the latest report from the World Platinum Investment Association. The global platinum market is already showing signs of supply tightness. Accelerating the development of platinum and palladium market, increasing strategic reserves through multiple channels and ensuring long-term supply capacity are already the arrows in the wind, which have become important measures for the implementation of the country's future social and economic development strategy. (Source: China Gold News)