Platinum and Palladium Fluctuated Downward During the Week, Spot Market Trading Normal [SMM Platinum and Palladium Weekly Review]

[SMM Platinum and Palladium Weekly Review] This week (January 26 – January 30), the most-traded platinum contract PT2606 opened at 720 yuan/gram and closed at 630.55 yuan/gram, down 48.4 yuan/gram or 7.13% WoW; the weekly highest price was 762.85 yuan/gram, and the weekly lowest price was 616.20 yuan/gram. The most-traded palladium contract PD2606 opened at 527.9 yuan/gram and closed at 464.05 yuan/gram, down 34.85 yuan/gram or 7.00% WoW, with a weekly high of 548.55 yuan/gram and a weekly low of 455.35 yuan/gram. In futures trading: the most-traded platinum contract PT2606 had a total weekly trading volume of 151,783 lots, a total turnover of 106.332 billion yuan, and an open interest of 26,982 lots, a decrease of 1,170 lots WoW. The most-traded palladium contract PD2606 had a total weekly trading volume of 79,159 lots, a total turnover of 40.903 billion yuan, and an open interest of 10,574 lots, a decrease of 774 lots WoW.

Recent price movements for platinum and palladium were mainly driven by factors such as US Fed dynamics, exchange margin hikes, precious metals sector linkage, and rising international political uncertainty. The US Fed held rates steady as expected, pausing interest rate cuts at the January meeting, with Powell stating that rates are at the high end of the neutral range and maintaining monthly balance sheet expansion of 40 billion. Regarding exchange dynamics, CME issued a notice on January 27 local time, raising margin requirements for some platinum and palladium futures contracts, with platinum increasing from 9% to 12% and palladium from 11% to 14%, effective after the close on January 28 local time. In terms of precious metals sector linkage, recent platinum and palladium price changes largely benefited from sentiment transmission within the overall precious metals sector, with significant resonance among gold, silver, platinum, and palladium. Additionally, exchanges, banks, and funds cooled the gold and silver markets through margin hikes, raising investment thresholds, and temporary trading halts, which may have spillover effects on platinum and palladium. International political uncertainty rose significantly recently, with Trump signing an executive order declaring a national emergency and establishing a procedure to impose tariffs on goods from countries selling or otherwise providing oil to Cuba. Attention should also be paid to the results of US anti-dumping and countervailing duty investigations on unwrought palladium from Russia, details of new management announced by LME within the month, and the announcement of the Fed Chairman candidate.

On the spot side, the spot market was still mainly supported by investment demand, with end-users making limited necessary stockpiling for year-end purchases at high levels and showing heavy wait-and-see sentiment for large purchases, resulting in moderate overall market trading.