fatdog@wwnet.net
Date: 06/25/00-08:50:53 AM Z
I thought some may be interested in the following article.
- JC Kuba
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Car makers use more platinum, less palladium
Detroit Free Press
November 15, 2000
REUTERS
NEW YORK—Car makers seeking cheaper autocatalyst metal supplies for
anti-pollution devices bought more platinum in 2000,
precious
metals refiners Johnson Matthey said Tuesday.
Johnson Matthey also predicting the first drop in 14 years in usage of
scarcer palladium.
"Part of the increase is due to automakers in the U.S. buying platinum
early in the year for inventory," Ellen Zadoff, North
American market
research manager for Johnson Matthey, said at a presentation of its
Platinum 2000 Interim Review.
"However the main reason platinum grew was because of the use of diesel
cars in Europe," she said.
But because palladium is more efficient in gasoline engines than
once-preferred platinum, it will continue to play a major
role in controlling
emissions in the face of stricter global laws limiting tailpipe gases,
especially hydrocarbons, according to Johnson
Matthey.
The forecast calls for year-end data to show a 2 percent rise in overall
platinum demand, with palladium purchases falling
960,000 ounces, or 10
percent, to 8.4 million ounces, mostly due to a 12 percent drop in use by
auto companies.
"In contrast to the last two years, when inventories of palladium were
added to substantially, this year several major auto
makers have drawn
down their stocks, to mitigate the impact of dramatically higher prices,"
Johnson Matthey said in its report.
Palladium demand from car makers and parts suppliers should fall by 720,000
ounces in 2000, to 5.16 million ounces as they
tap inventories
rather than pay market prices.
Several companies, including No. 1 General Motors Corp., said recently they
would reduce their dependence on palladium.
Gordon Bassett, general manager of the company’s U.S. precious metals
operations, said that automaker inventories equaling
six to 12 months
of PGM needs were "the norm." But palladium stocks are now near the minimum
six months’ worth.
Platinum is better at cleaning diesel fumes. Diesel sales are up 13 percent
in Europe and worldwide market share has risen
to 32 percent from
28 percent in 1999 as consumers opt for more fuel-efficient motors in the
face of high oil prices.
This accounts for much of the 90,000-ounce rise in platinum demand to 5.69
million ounces.
"In addition, there has been the beginning of a return to the use of
platinum in autocatalysts for gasoline cars, a move
that is expected to gain
momentum in future years, especially if the palladium price remains above
that of platinum," the report said.
Some 65 percent of all palladium comes from Russia, which has been
extremely erratic getting exports to the market since at
least 1997, when
the metal fetched just $120 an ounce, one third the price of platinum.
South Africa produces 72 percent of the world’s platinum and is a more
predictable source of PGMs.
Tougher anti-pollution laws and supply deficits of Platinum Group Metal
(PGM) supplies will continue, keeping prices near
recent all-time
palladium and 12-year platinum highs, even as global car sales begin to
slow, according to Johnson Matthey.
"The use of PGMs in autocatalysts is much more affected by legislation than
it is by auto sales," Zadoff said, adding that,
even if car sales were
off five percent in the year, it would have a very "small effect" on PGM
purchases.
Platinum prices averaged $528.93 an ounce in the first nine months of the
year, rising from a low of $414 in January to $612
in August, its
highest since December 1988.
Palladium averaged $640.76, in a range of $440 to $855 an ounce, which was
its highest price ever.
Auto sector demand for sister-metal rhodium is forecast to rise by 54,000
ounces to 563,000 ounces in 2000, with tighter
emissions standards
in Europe, Japan, Brazil, China and India helping foster changes in the PGM
mix in catalytic converters.
"In North America, changes in catalyst technology have been an important
influence on rhodium demand in 2000," Johnson
Matthey said. "High
palladium prices have encouraged some manufacturers to add rhodium to their
catalyst systems in order to thrift palladium
and reduce overall
cost."
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