Platinum Group Metals Gaining Ground in Defense and Aerospace Innovations
While rare earth elements (REEs) are attracting major global interest for their use in defence and modern technology, a commodity more familiar to the general public is quietly proving it is gaining in importance in those areas.
According to the World Platinum Investment Council (WPIC) moves to boost defence and aerospace spending could be positive for platinum group metal demand.
The WPIC recently noted that platinum group metals (PGMs) are being used extensively in defence and aerospace applications, from avionics and electronics to lasers and optical systems, including night-vision goggles.
Critical Aviation Materials
Platinum in particular has become a critical component in this space, used in catalytic converters for military vehicles and to reduce their vulnerability to thermal imaging and heat-seeking weaponry by suppressing their infrared signatures.
It also serves as a catalyst in fuel reforming systems for advanced military power units and provides protective plating on blades.
Platinum is also used with rhodium for temperature-sensing in engines and – due to their heat resistance – with iridium in missile nose cones.
Elsewhere, the WPIC noted that ruthenium is being used for chip resistors and palladium for military-specification capacitors and other components.
Hydrogen Applications
According to the WPIC, PGMs are also integral to various hydrogen fuel cell applications that are increasingly being explored for defence and aerospace purposes.
South Korean defence solutions company Hyundai Rotem – a subsidiary of Hyundai Motor Company – is developing the world’s first hydrogen-powered military tank.
The US Department of Defense is exploring a system for the country’s navy to generate, store, and distribute hydrogen both aboard ship and ashore, creating a tactical ‘micro hydrogen supply chain’ to include the use of Proton Exchange Membrane (PEM) electrolysis to generate hydrogen.
Price Forecast Upgrades
Kitko has reported that Nicky Shiels, head of research and Metals Strategy at financial and physical trading services specialist MKS PAMP, has upgraded her annual price forecast for platinum by 38% to approximately $2,100 an ounce.
“We were way too bearish on PGM demand being negatively impacted by auto-related trade tariffs and the broader negative effect of a trade war on economic growth and industrial demand,” she noted.
“Instead, regional and strategic stockpiling of critical metals like PGMs have ensured higher floors.
“The deep and sustained backwardation across both platinum ingot and sponge markets indicates broad-based deficits [and] the current lack of availability – or propensity for holders to let go of metal – is clearly contingent on higher prices.”
Sustained Supply Deficit
Meanwhile, WPIC recently reported that the platinum investment case remains compelling, with the overriding feature being that the substantial market deficits of 2023 and 2024 are expected to persist throughout the forecast period to 2029.
“Incusive of 2025 forecasts which are provided by Metals Focus, we expect annual platinum deficits to average 727,000 ounces from 2025 to 2029, or nine per cent of average demand,” the WPIC noted.
It also expects the palladium market to record a small deficit in 2025, before transitioning to a small surplus in 2026.