1 February 2019: Platinum provides some diversification benefit for portfolios: Recent market volatility reminds us of the importance of portfolio diversification. Adding a risky asset to an existing portfolio reduces overall portfolio volatility when the new asset has a correlation <1.0 with the existing portfolio. Our note explores platinum’s diversification dynamics and qualities.
Platinum Perspectives
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1 January 2019: Sustained palladium futures curve backwardation has ramifications for platinum: When futures curves change shape, they can impart valuable market information. The palladium futures curve has been in backwardation for over a year, a sign of a shortage in the metal. This is another indicator arguing for substitution of palladium by platinum in automotive applications, in our view.
1 December 2018: FCVs represent material long-term platinum demand: We investigate the potential impact of fuel cell electric vehicles on platinum demand, building a baseline forecast anchored on announced fuel cell vehicle and infrastructure plans in Japan, China, California and elsewhere. We find it generates material demand in the coming years.
1 November 2018: Upcoming China emissions regulations look likely to have a meaningful impact on PGMs demand: We highlight the likely impact of the upcoming China 6 emissions standards on platinum and platinum group metals (PGM) demand. The combination of tightening emissions standards and continued auto production growth means that China’s appetite for these metals has significant room to grow.
1 October 2018: The palladium premium is a potential platinum opportunity: We highlight the sustained palladium price premium to platinum and the potential effect on platinum demand. Historical substitution trends among platinum, palladium and rhodium in automotive catalysts mean that a sustained significant price premium of palladium over platinum looks unlikely.
15 September 2018: ETFs are an essential component of platinum demand: We highlight that Platinum ETFs, being physically backed, form an essential part of the annual platinum demand as vaulted allocated bars backing them are purchased in the spot market.
1 September 2018: Selective Catalytic Reduction systems do use platinum: We explain that Selective Catalytic Reduction (SCR) systems on diesel cars do not remove the need for platinum. Achieving low on-road NOx emissions should see higher platinum loadings on LNT and SCR emissions control systems.
1 June 2018: The palladium price is important for platinum investors: We outline how high demand and consecutive deficits increase risks to automakers of insufficient palladium and are a potential driver of substitution by platinum in gasoline cars.
1 May 2018: We look at fuel cell electric vehicle (FCEV) adoption, a potential driver of platinum demand: The similarity of fuel cell power growth to past growth in wind and solar power has not been widely recognised.
1 April 2018: Platinum’s attraction to gold investors: We highlight platinum’s precious metal attributes that could appeal to gold investors.