Core Viewpoint - Platinum prices have experienced the strongest monthly increase in nearly 40 years due to the EU's reversal of the 2035 ban on fuel vehicles, ongoing supply shortages, and rising demand for precious metals investment [1][2]. Group 1: Market Dynamics - Platinum and palladium are used in automotive exhaust purification catalysts, with prices significantly surging this year despite the long-term bearish outlook from the rise of electric vehicles [1][2]. - The EU's new policy is seen as a "booster" for platinum group metals, extending their application cycle in automotive catalysts by indefinitely relaxing the fuel vehicle ban and tightening emissions standards [1][2]. - As of December, platinum has risen 33% so far, marking the largest monthly increase since 1986, with a peak price of $2,478.50 per ounce and an expected annual increase of 146%, setting a new record [1][2]. Group 2: Supply Chain and Regulatory Factors - The inclusion of platinum and palladium in the U.S. critical minerals list has led to a tightening of regional physical market supplies, prompting companies to stockpile these metals defensively, which has further driven up prices [3]. - The market anticipates that details of U.S. policy will be clarified in January, which could impact supply and pricing dynamics [3]. - China's recent launch of platinum group metal futures contracts has attracted significant speculative capital, leading to adjustments in trading limits at the Guangzhou Futures Exchange [3][4]. Group 3: China's Market Influence - As the world's second-largest economy and the largest consumer of platinum group metals, China heavily relies on imports of these metals, and the newly launched futures contracts serve as the first domestic price hedging tool [4]. - Analysts suggest that if China's demand for spot imports remains high, the key test for platinum group metal prices may occur after the U.S. policy is implemented [4].

Core Viewpoint - The precious metals market, particularly platinum and palladium, has experienced significant price increases, with platinum rising 114% and palladium 85% year-to-date, driven by tight supply and strong market sentiment [2][4]. Group 1: Price Movements - On December 18, platinum reached a high of $1995.6 per ounce and palladium peaked at $1787 per ounce [2]. - By the end of the day, platinum and palladium prices retreated to around $1920 and $1680 per ounce, respectively [3]. - In the domestic market, platinum jewelry prices surpassed 800 yuan per gram, with some brands reporting prices as high as 815 yuan per gram [3]. Group 2: Market Drivers - The surge in platinum and palladium prices is attributed to multiple factors, including tight physical supply, strong market sentiment, and changes in energy policies [4][7]. - The global platinum market is expected to face a supply shortage for the third consecutive year, with a projected deficit of 850,000 ounces by 2025 [8]. Group 3: Institutional Perspectives - Different institutions have varying outlooks on the future of platinum and palladium. Some, like TD Securities, predict continued strong price increases due to robust automotive demand, while others, such as Heraeus, express caution about potential price corrections [9][10]. - The World Platinum Investment Council indicates that the supply of platinum is expected to remain constrained, with limited growth potential in the coming years [8]. Group 4: Historical Context - The price increase of platinum and palladium has occurred in three phases throughout the year, with significant supply disruptions in South Africa and geopolitical tensions contributing to the price dynamics [5][6].