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.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks
EUR/USD retreats toward 1.0850 on renewed USD strength
EUR/USD stays under modest bearish pressure and declined toward 1.0850 in the early European session on Tuesday, pressured by the renewed USD strength. ZEW sentiment survey will be featured in the European economic docket ahead of housing data from the US.
USD/JPY extends rally beyond 150.00 as markets assess BoJ decisions
USD/JPY preserves its bullish momentum after breaking above 150.00 with the 'sell the fact' reaction to the Bank of Japan's decision to end negative interest rates. In the post-meeting press conference, Governor Ueda said they will consider options for easing broadly, including ones used in the past if needed.
Gold price struggles to lure buyers, holds steady above one-week low ahead of FOMC meeting
Gold price ticks lower amid reduced Fed rate cut bets, elevated US bond yields and stronger USD. Geopolitical tensions could lend some support to the safe-haven XAU/USD and help limit losses.
Why is the crypto market crashing?
The two most important contribution to the ongoing bull market is the meteoric rise in Bitcoin due to the ETF approval and the sudden interest spike in Solana ecosystem. But the recent move suggests that the upward momentum is dissipating and a correction looms.
Lots of tension ahead of this week's Fed decision
Last week, we got a strong round of US economic data accompanied by hotter US inflation reads. The takeaway of course is that there might be a lot more pressure on the Fed to be looking to scale back its rate cut outlook at this week’s meeting.