Platinum’s drive to replace Palladium in catalytic converters
|This is one topic that warrants further investigation, and that readers should be aware of. It can be challenging to identify and extract significant information from the research, so here is a plotted summary of the main points:
1. Platinum is discounted in price compared to Palladium. See the chart below and notice how from 2018 the price of Palladium went soaring higher, while Platinum moved flat to sideways.
2. Since 2016 car makers have been in discussion about replacing Palladium with Platinum. This was due to Palladium shortage and not Platinum prices.
3. Fabricators expect platinum demand to increase from c.150koz this year to c1.5moz in 2025.
4. In Europe and China new lower emission levels have to be met by specific data so all car models to be sold in Europe and China in 2021 had their emissions systems redeveloped over the preceding three years. This means that Platinum could already be used in place of palladium. This could add as much as 400koz to platinum demand in 2021.
5. The drive for better emission levels means that more active metal is needed to work its purpose. This means that more platinum will be needed in each catalytic converter, so demand would only grow in order to meet higher emission standards. Look at the chart below to see how the combined demand for Platinum, Palladium, and Rhodium is growing.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.