[Platinum and Palladium Price Review and Forecast]
This week (from July 31 to August 6), platinum and palladium prices moved sideways before breaking out and rebounding strongly, ending the week with a sharp overall gain. At the start of the week, signals from US-Iran negotiations showed renewed divergence, with Trump and the Iranian military each holding their own stance on navigation in the Strait of Hormuz. The Middle East situation remained in a stalemate. This, combined with the continuation of a hawkish tone from the US Fed's July FOMC meeting, where rates were held steady but internal division intensified (9:3 vote, with three voters advocating a rate hike), kept the US dollar and Treasury yields high. As a result, platinum and palladium futures mainly consolidated. Mid-week, US Treasury Secretary Bessent signaled that a deal between the US and Iran, including the reopening of the Strait of Hormuz, was likely on August 4 or 5. International oil prices plummeted overnight, easing inflation expectations and driving down expectations for US Fed rate hikes (the probability of a September rate hike fell from around 72% to near 58%). Additionally, the US Commerce Department's plan to add 14 downstream derivatives of steel, aluminum, and copper to the Section 232 tariff scope raised the tail-end premium for platinum group metals (PGMs) trade protection. Combined with the release of oversold short positions and the return of safe-haven funds after platinum and palladium had cumulatively plunged over 45% year-to-date, the most-traded NYMEX platinum and palladium contracts both surged about 7.4% in the night session on August 4, marking their largest single-day gain since February 2026. This directly drove the domestic market to open higher with a gap and rally strongly on August 5, with the GFEX most-traded platinum contract settling at 441.15 yuan/g and the palladium contract at 329.65 yuan/g, both hitting new highs since early July. At the end of the week (August 6), the US ADP employment data for July showed only 44,000 new jobs, below expectations and the lowest this year. The weakness in small nonfarm data further dampened rate hike expectations. This, along with Iranian Deputy Foreign Minister's statement that the Hormuz navigation agreement with Oman was near finalization (with the new temporary route expected to be available for 2-4 months) and continued easing US-Iran tensions, kept platinum and palladium slightly higher, consolidating at highs. However, on the same day, US Fed Governor Cook reiterated readiness to raise rates if inflation didn't slow, signaling that hawkish cues remained. Platinum and palladium continued to consolidate at highs for the short term. The GFEX most-traded platinum contract hit a weekly high of 444.5 yuan/g and a low of 398.7 yuan/g, closing at 433.5 yuan/g as of August 6, for a weekly gain of about 8.4% for platinum. The most-traded palladium contract hit a weekly high of 333.75 yuan/g and a low of about 300.4 yuan/g, closing at 325.75 yuan/g as of August 6, for a weekly gain of about 6.5% for palladium.
In the spot market, driven by the sharp single-day futures rally on August 5, spot discounts for platinum and palladium widened slightly compared to the previous week. Spot prices lagged behind in the rally due to the spot-futures linkage. Mainstream quotations for platinum were quoted at discounts of about 4-2 yuan/g against the most-traded contract, and palladium discounts were about 3.5-1.5 yuan/g. As futures prices kept rising, downstream buying interest remained low, with bid-ask spreads widening. Trader warehouse warrant quotes were relatively firm, concentrated around discounts of 2 yuan/g against the GFEX most-traded contract. Consumption in automotive catalysts and industrial sectors stayed weak, with end-users mainly restocking on a need basis. Overall, spot market consumption for platinum and palladium continued to be sluggish throughout the week.
Looking ahead, platinum and palladium prices are currently in a rebound phase following oversold corrections, with both short-term upward drivers and downward constraints coexisting. On the bullish side, after deep corrections, short positions have been partially released, and the logic of fund inflows and oversold recovery remains in place. If the US-Iran navigation agreement is substantively finalized, oil prices and inflation expectations retreat further, and expectations for US Fed rate hikes converge, the valuation recovery for precious metals will continue. Trade protection expectations from Section 232 tariffs form a mid-term support floor. However, excessive optimism about the upside room and sustainability is not warranted. The core constraints are: first, this rebound is mainly driven by "international price correlations + oversold recovery fund flows," and the supply-demand fundamentals haven't undergone a reversal, with institutions widely questioning sustainability; second, the US Fed's hawkish stance remains unshaken, and the 9:3 divide in the July FOMC shows rate hike expectations for this year have not reversed, with the probability of a September rate hike still high, capping rates; third, doubts about the US-Iran agreement's implementation and escalating Houthi blockades in the Red Sea mean oil prices and inflation expectations could fluctuate again, potentially restarting a negative feedback loop. Future price direction still awaits further guidance from the evolution of US-Iran tensions, actual navigation in the Strait of Hormuz, US inflation data for August, and the US Fed's policy path.
[Platinum and Palladium Weekly Data Comments]
COMEX platinum and palladium inventories showed divergent trends this week. The earlier consistent destocking trend for platinum inventories slowed down temporarily. Total inventory remained around 399,000 oz (August 6), with registered inventory accounting for about 48%, indicating significantly weakened destocking momentum. The key reason was that after a sharp price rebound (over 7% in a single day), industrial buying turned cautious, with market entry pace slowing down and low-price restocking demand receding. For palladium, the inventory buildup trend continued, with total inventory at about 255,000 oz (August 5), with registered inventory accounting for nearly 80%. Buffer stocks in US warehouses were near a one-year high, keeping the supply oversupply pattern unchanged.
In terms of imports, platinum imports in June rose YoY again; palladium imports also picked up slightly, with the overall level significantly higher than from 2023 to 2025. China's platinum and palladium imports have grown rapidly since early 2026, and currently, domestic supply is relatively ample. Additionally, export restrictions on platinum and palladium make it hard to absorb the domestic surplus through exports.
[Platinum Group Compounds]
This week, chloroplatinic acid and palladium chloride were stable at first before rising sharply. In the early part, trading was weak due to downstream maintenance, but hydrogen energy demand provided some support for platinum-based compounds. Driven by soaring platinum and palladium prices overseas, domestic compound prices surged and hit recent highs, but actual downstream demand remained weak.
Chloroplatinic acid and palladium chloride prices followed a two-stage trajectory this week, stable initially before surging. In the first stage, from July 30 to August 4, they mainly moved sideways in a narrow range. Chloroplatinic acid fluctuated narrowly around 162-167 yuan/g, and palladium chloride consolidated in the 187-191.5 yuan/g range. Spot market trading was sluggish, with high temperatures causing concentrated maintenance in automotive, pharmaceutical, and petrochemical sectors, which dragged down spot transactions. In the hydrogen energy sector, peak deliveries of hydrogen production equipment provided some support for platinum-based catalyst demand, with platinum compound deliveries slightly outperforming palladium.
In the second stage, from August 5 to 6, prices surged violently. On August 5, chloroplatinic acid jumped to 177 yuan/g, and on August 6, it extended gains to 180 yuan/g, for a weekly change of 18 yuan/g, or a 11.11% weekly gain. Palladium chloride rose to 195.5 yuan/g on August 5, up 7 yuan/g, and then broke through 200 yuan/g to reach 204 yuan/g, for a weekly change of 17 yuan/g, or a 9.09% weekly gain, both hitting recent highs. This was mainly driven by the surge in overseas platinum and palladium, which transmitted to higher domestic raw material prices, boosting short-term bullish sentiment and pulling up compound raw material prices. However, from the overall downstream demand perspective, trading was quite sluggish, and demand continued to show a weak trend.
