Platinum Essentials

1 July 2023: Prioritising hybrid ICE technology would minimise life cycle CO₂ emissions and avoid a critical minerals shortage, versus the current “BEV first” strategy. This reports presents a scenario analysis of the evolution of the drivetrain and the associated critical mineral demand. Automaker prioritisation of pure Battery Electric Vehicle (BEV) production, will engender an imbalance between battery critical mineral efficiency and decarbonisation. A key conclusion is that in a critical mineral-constrained operating context, likely leading to a lithium shortage, versus BEVs, hybrids offer a better pathway to reducing average vehicle life-cycle emissions whilst maintaining supply demand balances within critical mineral markets.

1 July 2022: Higher substitution and loadings more than offset vehicle production risks to platinum automotive demand. We address valid investor concerns about the potential negative impact on demand for new vehicles from supply chain challenges and eroded consumer purchasing power – due to slowing GDP growth combined with significant inflation, negative 271 koz combined – but demonstrate that these are more than offset by potentially increased demand from higher platinum substitution for palladium (positive 512 to 853 koz), and higher loadings per vehicle in China (up to positive 1,300 koz ). Hence, risks are biased towards a reduced or completely eliminated surplus in 2022 and substantially increased deficits thereafter.

1 June 2022: Automotive drivetrain outlook and the implications for sustained long term platinum demand. This report contains the results of WPIC analysis, based on public data, which presents our automotive drivetrain projections out to 2040 and the associated automotive platinum demand. Our key conclusion is that although long-term growth in vehicle production comes only from BEV and FCEV, the internal combustion engine (ICE) is expected to remain a core part of the automotive landscape for some considerable time. ICE will feature in roles and regions that are unsuited to battery electrification. In combination with the latest emission standards which raise loadings, and especially increased platinum for palladium substitution in gasoline vehicles, this results in ICE-related automotive demand for platinum peaking in 2028 at 25% above current levels, with further platinum demand growth thereafter due to FCEVs.

15 March 2022: Fuel cell electric vehicles are forecast to be a key driver of material long-term demand growth for platinum. All technologies are needed to decarbonise transport; we see fuel cells as complimentary to battery electric vehicles with the potential to play an important role in uses less well suited to battery electrification, particularly in the heavy-duty segment. Automotive fuel cells use platinum catalysts to convert hydrogen gas as fuel and oxygen from the atmosphere into water while generating electricity. Supportive hydrogen policies could result in fuel cell electric vehicle (FCEV) demand for platinum equalling current automotive demand by 2039, but broad-based commercial adoption of FCEVs would bring this forward to 2033, adding over three million ounces to annual automotive platinum demand in ten years.

1 March 2022: How sanctions against Russia and Russian entities might affect the supply and demand of platinum group metals. Sanctions inflicted upon Russia in response to its invasion of Ukraine are having a significant impact on the business activities of Russian companies. Russia is a major supplier of raw materials, including platinum group metals, to the automotive industry. Restrictions on payments could cause immediate shortages in platinum and palladium. Palladium security-of-supply considerations will be more severe and could accelerate medium-term substitution of platinum for palladium in catalytic converters. Another possible consequence is a potential boost to the generation and use of hydrogen as Europe looks to reduce its reliance on Russian natural gas. This would support increased commercial adoption of fuel cell electric vehicles, a significant source of platinum demand in the future.

1 January 2022: Industrial demand for platinum can be highly variable on a short-term basis, due to steady top-up demand being intermittently boosted by capacity expansion demand. Industrial demand for platinum has grown at twice the pace of global GDP since 2013 and since 2020 has been second largest demand segment after automotive. Despite its importance, industrial demand is often overlooked analytically due to fragmented end uses and the high variability in published demand over the short term. This report highlights that the variability in industrial demand for platinum is a result of industrial demand being published ‘net’ of closed-loop or ‘internal’ recycling. Industrial facilities that use platinum typically require significant up-front loadings when a plant is built or expanded, after which only small top-ups are needed to off-set losses during plant operation. Consequently, most industrial demand comprises steady on-going top-up demand, supplemented by staccato periods of extra demand due to capacity expansions, or, more rarely, recycling supply from the closure of facilities.

1 February 2021: Platinum Above Ground Stocks (AGS) are low relative to historic levels as well as those of palladium and rhodium and should not deter further investment in platinum. In this edition of Platinum Essentials, we present Above Ground Stocks (AGS) for platinum, including an analysis of estimating AGS and a comparison with AGS estimates of palladium and rhodium. AGS are a natural part of physical metal markets. However, methodologies for calculating annual supply demand balances vary across different data providers, with the result that AGS definitions and therefore estimates can vary significantly. In comparison to other PGMs, platinum AGS appear relatively benign compared to current and potential future annual platinum demand.

1 March 2020: Palladium: An introduction for platinum and palladium investors. In this edition of Platinum Essentials, we present a detailed analysis of the palladium market to provide a framework for platinum investors and others interested in the palladium market. The high price of palladium relative to platinum is positive for platinum demand as palladium substitution by platinum in automotive catalysis is the likely mechanism that will drive market rebalancing.

1 February 2020: Are cryptocurrencies relevant to platinum’s investment case? Our latest Platinum Essentials explores whether the emergence of cryptocurrencies is relevant to the investment case for platinum.

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1 January 2020: Platinum 101 – An introduction for investors. Platinum Essentials is a product exploring topics affecting platinum as an asset class. Our first edition is a Platinum primer, answering fundamental questions on platinum.