Rise in diesel vehicles to help platinum shine
Friday, 26 November 2010
LONDON, Nov 25 (Commodity Online): Even as analysts are splitting the hair about the reason for platinum to perform slowly in this year despite a big show by palladium (60 per cent rise), the metal is showing no signs of doing a stellar show in this fiscal.
But the silver lining in the horizon is Johnson Matthey's half-year results, which showed a 72 per cent rise in heavy-duty diesel catalyst sales in the six months to June 30. This means more and more people will be driving diesel vehicles which need platinum as catalytic converters.
Palladium and silver prices are already up 60% this year. But platinum prices gained just 14 per cent this year.
Johnson Matthey, which has one-third of the market for platinum- and palladium-coated catalytic converters, which reduce noxious vehicle emissions, reported a 72-per cent rise in heavy-duty diesel catalyst sales in the six months to June 30.
The European Union is following the US in imposing tougher heavy-duty diesel emission standards on a range of engine sizes in the next four years. The heavy-duty diesel catalyst market could be worth $2.5 billion by 2015 compared with $600 million now.
Platinum is more efficient in absorbing diesel-engine emissions than palladium, the catalyst of choice in the gasoline-dominated auto sector. Heavy-duty diesel catalyst demand for platinum might be 1.5 million ounces by 2015, or about a fifth of current gross global demand.
The platinum market is likely to be in a small surplus of 290,000 ounces this year.
But supply may struggle to keep up with demand. South Africa's deep-level mines produce 80 per cent of annual output.
Edgy labour relations, safety considerations and the rand's strength against the dollar make expanding output difficult. South African output is forecast to fall slightly to 4.6 million ounces this year.
But the silver lining in the horizon is Johnson Matthey's half-year results, which showed a 72 per cent rise in heavy-duty diesel catalyst sales in the six months to June 30. This means more and more people will be driving diesel vehicles which need platinum as catalytic converters.
Palladium and silver prices are already up 60% this year. But platinum prices gained just 14 per cent this year.
Johnson Matthey, which has one-third of the market for platinum- and palladium-coated catalytic converters, which reduce noxious vehicle emissions, reported a 72-per cent rise in heavy-duty diesel catalyst sales in the six months to June 30.
The European Union is following the US in imposing tougher heavy-duty diesel emission standards on a range of engine sizes in the next four years. The heavy-duty diesel catalyst market could be worth $2.5 billion by 2015 compared with $600 million now.
Platinum is more efficient in absorbing diesel-engine emissions than palladium, the catalyst of choice in the gasoline-dominated auto sector. Heavy-duty diesel catalyst demand for platinum might be 1.5 million ounces by 2015, or about a fifth of current gross global demand.
The platinum market is likely to be in a small surplus of 290,000 ounces this year.
But supply may struggle to keep up with demand. South Africa's deep-level mines produce 80 per cent of annual output.
Edgy labour relations, safety considerations and the rand's strength against the dollar make expanding output difficult. South African output is forecast to fall slightly to 4.6 million ounces this year.