Core Insights - The U.S. is considering significant adjustments to its critical minerals policy, with platinum group metals facing a notable risk of tariffs under Section 232 due to supply chain concentration and geopolitical risks [1][12] Group 1: Policy and Regulatory Developments - The U.S. Department of Commerce is overdue in submitting a critical minerals report that will assess the national security implications of imports, including platinum and palladium [1] - The report is linked to Executive Order 14272 and is expected to evaluate the impact of key mineral imports on national security [1] - The U.S. International Trade Commission's preliminary ruling on anti-dumping for Russian palladium was due on October 20, indicating dual policy risks for palladium [1] Group 2: Market Dynamics and Supply Chain - Potential trade restrictions could exacerbate existing supply tightness in the white precious metals market, with leasing rates for platinum group metals currently above normal levels [2] - Industrial users are experiencing rising operational costs, prompting some to shift from ownership to leasing of metals [2] - Umicore's decision to sell its long-held gold inventory in favor of leasing highlights the market pressure [2] Group 3: Risk Assessment of Platinum Group Metals - According to Deutsche Bank's policy risk scorecard, platinum and palladium exhibit high risk across several dimensions, including global supply concentration and import dependency [5][7] - The Herfindahl-Hirschman Index (HHI) for platinum is 5230 and for palladium is 3137, indicating a high concentration risk [5] - Platinum's net import reliance is 85%, significantly exceeding the 50% threshold for high dependency [7] Group 4: Supply Capability and Geopolitical Risks - South Africa, the primary supplier of platinum, has a risk score of 81, while Russia, the main supplier of palladium, has a score of 90, both categorized as high risk [10] - The U.S. imports nearly 50% of its platinum from South Africa and a similar proportion of palladium from Russia, highlighting the geopolitical vulnerabilities in the supply chain [12] Group 5: Strategic Policy Tools - The U.S. has adopted non-tariff strategies for rare earth elements, contrasting with the current administration's support for tariffs as a tool to stimulate domestic manufacturing [11] - The Department of Defense has established partnerships and funding frameworks to support critical mineral projects, emphasizing flexible financial support over tariffs [11] - The rapid timeline of policy actions seen in copper could be mirrored in the case of platinum group metals, with significant tariff risks looming [12]