NATO Defense Spending Pledge Puts Spotlight on | Commodities
NATO’s determination to increase protection spending is casting recent consideration on the strategic position of platinum group metals (PGMs), a suite of vital minerals important to aerospace and navy applied sciences.The World Platinum Investment Council (WPIC), in its latest “60 Seconds in Platinum” briefing, famous that sustained growth in protection budgets might translate into increased demand for PGMs, that are already deeply embedded in vital protection and aerospace systems.
In the Hague Summit Declaration issued June 25, 2025, alliance leaders dedicated to raising protection expenditure to five % of GDP yearly by 2035, a important step up from the longstanding 2 % guideline. The determination is designed to make sure “individual and collective obligations, in accordance with Article 3 of the Washington Treaty,” whereas addressing mounting geopolitical uncertainty.”Allies agree that this 5 percent commitment will comprise two essential categories of defence investment. Allies will allocate at least 3.5 percent of GDP annually based on the agreed definition of NATO defence expenditure by 2035 to resource core defence requirements, and to meet the NATO Capability Targets,” the NATO assertion reads. Additionally, “Allies will account for up to 1.5 percent of GDP annually to inter alia protect our critical infrastructure, defend our networks, ensure our civil preparedness and resilience, unleash innovation, and strengthen our defense industrial base.” PGMs, which embrace platinum, palladium, rhodium, iridium, and ruthenium, have a big selection of navy makes use of due to their distinctive catalytic, conductive, and heat-resistant properties.
In the protection industry, they’re generally present in avionics and electronics, lasers and optical systems, and night-vision goggles.Aircraft engines rely on platinum and rhodium for temperature sensing, whereas platinum can be used as a protecting plating for turbine blades. In missile systems, platinum and iridium are integrated into nostril cones for his or her capacity to resist excessive heat.Military autos additionally draw on platinum for catalytic converters and infrared suppression systems, which help scale back thermal visibility towards heat-seeking weapons. Platinum catalysts are integral to superior fuel reforming systems designed to energy next-generation navy models.Other PGMs serve area of interest however indispensable roles. Ruthenium is utilized in chip resistors, whereas palladium is vital in military-grade capacitors. Reed switches, that are magnetic sensors utilized in high-risk or excessive environments, typically rely on rhodium and iridium to make sure sturdiness and security.
Hydrogen fuel cells gain traction
One of essentially the most promising growth areas highlighted by WPIC is the intersection of PGMs and hydrogen applied sciences in protection.
Proton exchange membrane (PEM) fuel cells, which rely on platinum catalysts, are being examined in land autos, naval purposes, and unmanned aerial systems.In South Korea, Hyundai Rotem, a protection subsidiary of Hyundai Motor (KRX:005380,OTC Pink:HYMTF), is developing what it calls the world’s first hydrogen fuel-cell powered navy tank. Meanwhile, Ukraine’s Skyeton not too long ago reported the profitable take a look at flight of a hydrogen fuel-cell powered unmanned aerial vehicle (UAV).Hydrogen propulsion could possibly be significantly transformative within the UAV sector, WPIC famous, since fuel-cell systems offer increased vitality density and lighter weight in comparison with conventional batteries, enabling longer flight instances and higher operational flexibility.In the United States, the Department of Defense is finding out a “micro hydrogen supply chain” for the Navy that might generate, store, and distribute hydrogen each at sea and onshore.As governments combine their protection methods with climate and vitality transitions, PGMs seem set to play an even bigger position. Hydrogen fuel cell adoption in navy purposes might additionally additional deepen this connection.
“Moves to boost defense and aerospace spending could be positive for platinum group metal demand,” WPIC famous, including that NATO’s spending pledge and industry innovation spotlight how PGMs are extensively utilized in protection and aerospace purposes.
Beyond PGMs
While PGMs are indispensable, they’re only one half of a wider set of vital uncooked supplies that underpin trendy protection capabilities. Rare earth components (REEs), as an example, play a decisive position within the efficiency of superior navy platforms. According to knowledge from Benchmark Mineral Intelligence, an F-35 Lightning II fighter jet requires round 418 kilograms (kg) of REEs, together with neodymium and praseodymium in everlasting magnets used for flight control and stealth systems.Naval platforms demand even more: the Arleigh Burke-class destroyer makes use of about 2,600 kg of REEs, whereas the Virginia-class submarine requires roughly 4,600 kg, supporting propulsion, sonar, radar, and missile steerage systems. The above examples illustrate each the huge materials depth of superior navy belongings and the strategic vulnerabilities that include dependence on exterior suppliers.
NATO has already flagged these dangers. In December 2024, it revealed a record of 12 defense-critical uncooked supplies important to Allied security, together with aluminium, cobalt, graphite, titanium, tungsten, lithium, and uncommon earth components alongside platinum. For the PGM sector, NATO’s spending pledge might show to be a tailwind. Yet the larger image means that different related assets will all kind half of the identical strategic equation of international locations racing to secure the foundations of a steady provide chain.
Don’t overlook to observe us @INN_Resource for real-time news updates!Securities Disclosure: I, Giann Liguid, maintain no direct investment curiosity in any company talked about on this article.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
Stay up to date with the latest news within the commodities markets! Our web site is your go-to source for cutting-edge commodity news, market trends, insights, and updates on key assets. We present every day updates to make sure you have entry to the freshest data on commodity actions, industry efficiency, provide and demand shifts, and main market bulletins.
Explore how these trends are shaping the long run of international commodities! Visit us usually for essentially the most partaking and informative content material by clicking right here. Our rigorously curated articles will keep you knowledgeable on market shifts, investment methods, commodity evaluation, and pivotal moments within the world of assets.
