(Yicai) Dec. 17 -- China’s newly launched platinum futures have rallied, driven by tightening supply and robust demand from the new energy industry.

The main platinum futures contract on the Guangzhou Futures Exchange closed 0.7 percent up yesterday, reaching as high as CNY485.75 (USD68.95) per gram, after jumping by as much as 7 percent and triggering a trading halt the previous day. Platinum futures debuted on the exchange on Nov. 27 at a benchmark price of CNY405.

On the New York Mercantile Exchange yesterday, platinum futures climbed to USD1,913.90 per troy ounce, bringing the past month’s gain to about 23 percent. They have surged 110 percent so far this year, far exceeding gold’s 63 percent gain.

Multiple factors are driving the rally, including the continuous tightening of spot supply, policy guidance for the new energy sector, and changes in the geopolitical environment, according to traders.

White precious metals such as platinum and silver have hedging properties while being deeply intertwined with industrial demand and the global energy transition, so their price logic has partly deviated from the traditional precious metals framework to create a certain ‘green premium,’ Deng Weibin, Asia-Pacific managing director at the World Platinum Investment Council, told Yicai.

China is the world’s largest consumer of platinum group metals, with about 60 percent of its platinum demand tied to green industries. The metal is a critical input for applications ranging from vehicle emissions-control systems to wind power equipment and hydrogen energy technologies.

Platinum is in short supply globally, with the market expected to show a deficit of 26.4 tons this year, although demand is also forecast to decline by 4 percent to 244.8 tons from last year, according to the latest figures from the WPIC.

The price surge is not just a local commodity frenzy, the traders noted. It also reflects global capital betting on de-dollarization and the new energy transition.

In the short term, the pace of interest rate cuts by the US Federal Reserve, geopolitical conflicts, and supply disruptions in South Africa remain key variables, they said, adding that in the medium-to-long term, progress in hydrogen energy industrialization and breakthroughs in recycling technology will need to be closely watched.

The platinum market will likely be in shortfall again next year, Heraeus Group said in its 2026 Precious Metals Forecast Report. Since platinum is cheaper than gold, demand from the jewelry market may bring new growth drivers, the German precious metal producer noted.

Editor: Futura Costaglione