Will BBX benefit as the Guangzhou Futures Exchange prepares to launch a platinum contract?

Fri 09 Sep 22, 1:43pm (AEST)
The city of Guangzhou lit up at night
Source: Unsplash

Key Points

  • BBX Minerals has found more platinum 100m to the west at the Adelar target, part of the Três Estados project
  • Platinum prices have recovered from late August losses in recent days
  • At an event in Shanghai this week, Deputy Manager of the Guangzhou Futures Exchange confirmed a Chinese platinum contract is on the way

BBX Minerals’ (ASX:BBX) has had more luck today at its Brazilian Três Estados platinum project as the company extends the size of its known mineralised area by 100m to the west. 

The target area in question is the Adelar prospect on-site.

The move comes on the back of short drill core results which will ultimately require further testing to confirm the extent of grades. 

However, the detection of platinum in the previously undrilled area provides evidence mineralisation underground is larger than previously known. 

Stream of assays on back of high-tech purchase 

BBX Minerals recently purchased its own Atomic Absorption Spectrometer, allowing BBX to fastrack its assay operations for platinum and iridium, with evidence of surface mineralisaton for both now confirmed. 

Last month, the company reported positive assay results for samples collected in drilling campaigns between 2020 and 2021. 

Price of platinum on the up 

As of September 9, Platinum futures are down by -7% compared to this time last year. 

In late August, platinum futures were trading below US$820/oz, however, in the first nine days of September, futures contracts have risen to $880/oz.

The cause of this rise is somewhat opaque, however, there is one development worth noting. 

Earlier this week in China, at an event in Shanghai for traders in the platinum market, China's upcoming platinum futures benchmark was a topic of much discussion. 

The Chinese government has approved the Guangzhou Futures Exchange (GFEX) to begin launching new commodities contracts in the near future, according to Deputy Manager Leng Bing, speaking at Shanghai Platinum Week.

Platinum futures are currently traded on the NY Mercantile Exchange, the Tokyo Commodity Exchange and the London Bullion Market.

What is platinum used for? 

At this current time, the price of platinum is most dominantly linked to output from the vehicle industry. 

Platinum is a key component in catalytic converters, devices which filtrate vehicle exhaust. Such is the concentration of platinum in the devices that they are typically targeted by car thieves.

However, following suppressed demand and output in the vehicle sector broadly (driven by a microchip shortage and depressed economic outlooks,) platinum futures have fallen in 2022.

Platinum is also used in energy (refineries) and the chemical and power industries.

Green hydrogen to boost demand: Bloomberg 

Iridium, a byproduct metal of platinum, is a major component in electrolysers, the devices which use water and electricity to create hydrogen. 

An electrolyser powered by renewable energy is considered a viable method to produce green hydrogen, and electrolysers use a lot of iridium. 

By 2030, Bloomberg Intelligence expects platinum demand to grow by 700,000oz a year and potentially doubling to 1.7Moz a year by 2035.

This thesis was backed up by the World Platinum Investment Council (WPIC) this month, when it released its August market report. 

Ultimately, the WPIC expects demand for electrolysers to boost demand for the world's best known scarcest metal.

The current shape of BBX Minerals' three month charts


Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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