Palladium To Outperform Platinum In Next Few Years

Palladium To Outperform Platinum In Next Few Years — Thomson Reuters GFMS
–Palladium is likely to outperform platinum in the next few years as dwindling supply and demand for palladium will increase, said a mining analyst at a metals consultancy.

Russian palladium supplies are likely exhausted, said William Tankard, senior mining analyst at Thomson Reuters GFMS.

As vehicle sales rise, demand for autocatalysts will increase and cheaper-priced palladium should continue to take market share from platinum. Those are two reasons that palladium will outperform platinum in the coming years, Tankard said.

He spoke at the PDAC2012, the Prospectors & Developers Association of Canada’s annual convention, which occurs from Sunday to Wednesday in Toronto.

In the coming years palladium could rise to $1,000 an ounce, from about $700 now, whereas platinum’s prices may stay flat, around $1,700.

Platinum’s use in autocatalysts remains 25% under the 2007 levels, Tankard said. Palladium also has begun to eat into platinum’s market share in autocatalysts and that is helping stocks to grow in platinum. Right now palladium has 90% of the market share in gasoline engines and is rising in diesel engines, Tankard said.

The only area of growth for platinum is possible growth in the heavy-duty diesel sector in China, he said, while the only caveats for palladium is any move to smaller engines and the outlook for electric vehicles. Those cars may not use PGMs in their construction.


The scrap market for both palladium and platinum is starting to grow modestly for, but that could start to increase in coming years. He noted that the supply of cars scrapped are generally coming from cars dated from 1996-98 which have had lower amounts of PGMs. But as newer cars come onto the heap, they will have more PGM metal in them and thus become “a far richer PGM supply.”

The strike at Impala’s Rustenburg mine in South Africa seems to be settled, but it will still take a few weeks to rehire workers and get production up and running. Tankard estimated about 120,000 ounces of platinum production was lost during the strike.

Although platinum prices rallied sharply on the news, the actually effects of the strike haven’t been felt by the market because of the long time it takes for pipeline impacts to infiltrate. Those impacts will begin to become evident at the end of March into April.


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