Palladium under duress

[pmbug]

The platinum group metals (PGM) basket is under strain, but that’s due more to a decline in aggregate car sales rather than a shift toward electrification, says Matt Watson, founder of Precious Metals Commodity Management LLC., and host of Green Rush — a program that focuses on precious and critical minerals as they impact the clean energy transition.

In mid-March Watson spoke to Jonathan Butler, head of business development at Mitsubishi Corporation.

Platinum, palladium and rhodium are key metals used in autocatalysts, or catalytic converters, which reduce tailpipe emissions in vehicles. Palladium is typically used in gasoline engines whereas platinum is more often used in diesel engines.

Watson noted aggregate car sales are down about 23% and haven’t hit 93 million since 2017.

“Vehicle sales I think are the lever that's hurting the PGM basket at this point, more so than the EV penetration rate,” he said.

Butler agreed, listing the factors that have resulted in lower sales: the slowdown in China, the covid-19 pandemic, the semiconductor shortage, and now, higher interest rates deterring new car buyers.

“There's something like a 10-million-unit vehicle delta between where things

should have been had we not had the pandemic and the chip crisis and everything else, and where we actually are now,” he said. “Those are vehicles that just simply weren't made and incidentally that has quite an influence on the long-term recycling market because there's going to be a missing generation of vehicles that aren’t coming through the recycling stream.”

Lower internal combustion engine (ICE) sales have had an impact on palladium and rhodium, which have accumulated surplus and whose prices have fallen over the past two years. Eighty-five percent of demand for these metals is from gasoline and diesel engines.

“When you look at the long-term outlook palladium and rhodium are really going to be challenged,” Watson said.
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More:

https://www.kitco.com/news/article/2024-03-22/why-palladium-rhodium-are-really-going-be-challenged-matt-watson-metals-are

 

[Voodoo]

This is wrong... Palladium is by far more interesting for Hydrogen than any of those metals.

Watson and Butler both see increased demand for platinum, iridium and ruthenium, which are critical materials for the hydrogen economy — fuel cells and green hydrogen electrolyzers.

 

[searcher]

Sal's take..........

BAD News For Platinum!
Mar 24, 2024

13:19

 

[pmbug]

Sal's take..........

About platinum or palladium?

 

[searcher]

About platinum or palladium?

Both.

Edit to add: You like to read. Below the vid you can click on to

Transcript
Follow along using the transcript.
Show transcript

It's a quick read:

4:07
rodium the two metals are chiefly used
4:10
in catalytic converters used to clean
4:13
exhaust fumes by the auto sector an area
4:16
that accounts for some 40% of platinum
4:18
demand and 80% of Palladium off take
4:22
losing that demand will be significant

 

[nickndfl]

Buy platinum. There will come a time when you cannot get physical unless it goes thru a BRICS pm exchange.

 

[pmbug]

If that's correct (80% of palladium demand is from ICE car production), that's really sensitive to the auto market, which, like real estate, is going to be hampered by the Fed's interest rate policy.

 

[BeefJerky]

Yes, platinum is worthless. It's only 30x more rare than gold. No one will ever have a use for it....lol

 

[Voodoo]

It almost all gets used up to, unlike gold. It's more like silver in that since but it starts out much rarer.

 

[BeefJerky]

If you own just 400 ounces of platinum you own like .1% of all platinum ever minted into government issued coins. Let that sink in. Walk into a coin shop and try to find more than 10 ounces on hand.

 

[Voodoo]

I know my local guy doesn't have an ounce of Pt or Pd. Maybe not intelligent enough people around to even understand.

 

[pmbug]

There isn't sufficient demand/market liquidity for most (small/mom-and-pop) LCSs I would imagine.

 

[nickndfl]

SD usually has the lowest premiums on 1oz. coins while BE offers the best deals on 1/10ths.

 

[pmbug]

Who is BE?

 

[nickndfl]

Bullion Exchanges, LLC