The outlook for green hydrogen becoming more defined is enabling projects that are technologically robust to attract the funding and offtake commitments required to move forward and this should provide support for the minor metals, of which South Africa is the largest producer, this week’s Heraeus Metals’ Precious Appraisal avers.  

The EU and South Africa have agreed an €11.5-billion green energy transition package, as reported by Engineering News this month.

Through Global Gateway, Team Europe – the EU, its member States and development finance institutions – is mobilising an €11.5-billion investment package with South Africa.

The partnership focuses on the just energy transition, sustainable infrastructure, digital connectivity and pharmaceutical value chains in South Africa, the publication reported.

The appraisal theorises that the EU believes it is both cheaper and cleaner to make green hydrogen in South Africa, with its sun and wind resources, and that the country is already making progress in the green energy space with projects such as the Coega green ammonia project.

Much of the announced investment is expected to go towards similar projects.

While the promise of green hydrogen has long been discussed, the outlook is now becoming clearer – narrower in scope, but clearer in definition, the appraisal points out.

The appraisal shows that iridium and ruthenium prices remained steady last week, while the rhodium price increased $1 000/oz.

Fundamental strength has driven ruthenium through a considerable rally this year, with demand from industry driving prices to record highs.

Iridium, meanwhile, has lagged, lacking fresh momentum from the hydrogen sector.

MAJOR PRECIOUS METALS

The gold price rose over $200/oz last week for its largest weekly gain of the recent rally and is getting even more overbought.

A ceasefire in Gaza removes some geopolitical concerns, which in theory should be bad for gold; however, its appears as though fear of missing an opportunity is driving the rally, the appraisal posits.

Record prices are expected to crimp jewellery sales for Diwali, typically an auspicious occasion for golds purchases, as Indian jewellery buyers are price-sensitive and tend to wait out periods of price volatility.

The festival falls on October 20.

Gold jewellery sales in India were down 17% year-on-year in the second quarter at 88.8 t, according to the World Gold Council.

However, Indian investors may be helping to drive the price rally and with banks struggling to meet robust demand, the local gold premium reportedly reached $25/oz, the appraisal shows.

Gold’s availability in India may have been limited by subdued imports this year, with 8.3-million ounces imported in the year-to-August (latest data), down 44% compared to the same period last year.

Imports in August last year were boosted to five-million ounces by the reduction of the import duty from 15% to 6% in the month before.

Silver spot prices surged above $54/oz.

The squeeze in the physical market remained intense but loosened slightly, reflected by an easing in backwardation across the forward curve and a pullback in one-month lease rates from over 30% to 20%, the appraisal indicates.

The forward curve stayed inverted, though near-term discounts narrowed from above 5% during the prior week to around 1%, with the curve flattening further out.

The appraisal explains that COMEX inventories offered part of the explanation, with 10-million ounces exiting the US as traders engaged in cash-and-carry unwinds – selling spot and buying futures.

Exchange-traded funds (ETF) activity also proved highly volatile last week, with investors adding 9-million ounces early on before reversing course with two consecutive days of outflows exceeding 10-million ounces.

This marked the largest single session decline since February and indicated some tension in sentiment.

Section 232 introduces another layer of uncertainty, the appraisal warns.

The potential inclusion of silver in the review could hinder much-needed outflows from US warehouses, further tightening liquidity in other regions and encouraging domestic stockpiling.

Meanwhile, platinum briefly surged above $1 700/oz but appears to be entering a more measured uptrend.

Gains this week mirrored the previous week, with prices edging up just 1%.

China’s return from the weeklong Golden Week holiday saw platinum trading on the SGE maintain healthy levels, despite high platinum prices.

Palladium rallied strongly last week, with spot prices pushing past $1 600/oz, closing in on platinum.

For now, palladium appears to have pipped platinum, posting a good 5% gain over the week.

The metal is likely to draw additional attention in the coming weeks as the US pursues its ongoing antidumping probe into Russian palladium, initiated in August, the appraisal highlights.

Palladium could also be impacted by the Section 232 review, raising the possibility of new tariffs on critical minerals.

Also, autocatalyst demand for palladium and rhodium could face renewed headwinds as Germany moves to reintroduce purchase subsidies for battery electric vehicles.