Platinum at a five-week high as markets continue to digest the new European Hydrogen Bank

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(Kitco News) – The growing energy crisis in Europe is prompting policymakers to look to new sources of energy, and hydrogen could be a game-changer for the region and help push platinum prices to a five-week high.

Platinum is gaining momentum as investors continue to digest last week’s news that the European Union will set up a new European Hydrogen Bank to bridge the investment ceiling between future supply and demand. Platinum futures for October were last traded at $918.40 an ounce, up nearly 2% on the day.

Ursula von der Leyen, President of the European Commission, said in her announcement that the bank intends to invest €3 billion in developing the region’s hydrogen market.

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“Hydrogen can be a game changer for Europe. We need to scale up our hydrogen economy from niche,” von der Leyen said at the September 14 press conference. “To achieve this, we need to create a market maker for hydrogen to bridge the investment gap and connect future supply and demand.”

The European Commission’s development of a hydrogen bank is the latest step by the European Union in its quest for green sustainable energy, outlined in its REPowerEU plan published in May. Under the plan, the EU wants to build up a supply of 20 million tons of green hydrogen by 2030.

According to some market analysts, the growing hydrogen economy could significantly change the supply and demand outlook for platinum. The precious metal is a crucial component in electrolysis, the process by which water is separated into hydrogen and oxygen molecules. Green hydrogen is produced from renewable energies such as solar or wind power.

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The hydrogen economy currently represents a small portion of platinum demand; however, it is growing rapidly. In a report released last week, analysts at Metals Focus said platinum demand in the hydrogen economy could surpass 100,000 ounces in 2023.

The World Platinum Investment Council sees hydrogen demand for platinum as a key demand sector for the precious metal.

“Platinum’s role in unlocking hydrogen’s critical contribution to achieving global net-zero goals is becoming more widely known, offering investors looking for exposure to this space an option The US Inflation Mitigation Act measures greater demand for green hydrogen importance and provides further incentives for investment in this sector, which benefits platinum directly,” said Paul Wilson, CEO of the World Platinum Investment Council, in the WPIC second quarter outlook report released earlier this month.

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