China First Futures: Geopolitical Conflict Drives Strong Crude Oil, Platinum and Palladium Retreat and Decline

Geopolitical conflicts persist. This morning, Iran announced the Strait of Hormuz has been closed. The Middle East region is experiencing widespread chaos, significantly disrupting global oil supplies, and oil prices remain strong. Today, platinum and palladium prices plummeted. Early in the morning, platinum fell nearly 6%, while palladium dropped over 4%. In the afternoon, the downward trend continued, with platinum falling over 8% and palladium over 5%. Market focus has shifted from risk aversion to industrial impact for platinum and palladium, as their core value is linked to the global fuel vehicle industry (catalytic converter demand). Although fuel vehicle production is gradually stabilizing and no longer declining, the surge in crude oil prices due to geopolitical conflicts may reduce demand for fuel vehicles, potentially dampening industrial demand for platinum and palladium. The supply-demand gap for platinum and palladium has temporarily eased. Under macro and industry dynamics, it is expected that platinum and palladium will remain volatile in the short term. Future trends will depend on the further development of ongoing conflicts. (First Capital Futures)