London Platinum Lease Rate Surges to 29% - "Market May Already Be Broken"

Note to bullion banks: leverage works in both directions

Further to this Substack’s observations on platinum market shortages two days ago, today bullionvault.com posted the following on-point comments by Bruce Ikemizu, formerly head of Chinese bank ICBC's Tokyo precious metals desk and now head of the Japan Bullion Market Association. :

"It seems that there really is no platinum in loco London/Zurich," says Bruce Ikemizu, formerly head of giant Chinese bank ICBC's Tokyo precious metals desk and now head of the Japan Bullion Market Association (JBMA).

"Paying nearly 30% interest to borrow the metal makes it reasonable to consider just buying it outright," says Ikemizu.

"Behind the banks are the actual users who borrow from them," the JBM chief goes on, citing mining companies, recyclers, jewellery manufacturers and industrial users.

"For the ultimate borrowers, the situation is extremely challenging. I cannot recall a time when lease rates rose this sharply. Unless metal returns to London/Zurich, there is a risk that prices could spiral upward due to buying pressure from those who need metal.

"The market may already be broken."

Bullionvault also posted today the following London 1-month platinum lease rate showing a 29% rate to borrow platinum in London:

Figure 1 - London 1-Month Platinum Lease Rate & Platinum Price; source: JBMA & LBMA

London is the largest cash market for platinum globally.

If, as Ikemizu notes, London appears to have virtually no physical platinum available for delivery yet continues trading nearly 3 million (M) oz. per day of London promissory note cash contracts for immediate platinum ownership and delivery, something is about to break.

The revelation of the frailty of the London platinum paper market can knock-on to other London metals, such as silver, that are also traded as leveraged cash contract promissory notes thus lifting the veil on one of the biggest market frauds in history.

Silver is also now seeing a concurrent surge in its 1-month lease rate to 7%.

Best regards,

David Jensen