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JM: Platinum market to move into surplus for the first time in six years

17 May 2017

With autocatalyst, jewelery and investment demand forecast to slow, the platinum market is predicted to move into surplus in 2017 for the first time in six years, according to the May 2017 edition of the PGM Market Report by Johnson Matthey.

The predicted decline in the autocatalyst platinum market is to a large extent due to the declining use of Pt in European diesel cars, which is driven by the Real Driving Emissions (RDE) legislation. To pass the RDE tests, NOx emissions must be controlled over a wider range of operating conditions. This requires a wider use of SCR technology, which uses relatively low Pt loadings, replacing the platinum-intensive NOx adsorber catalysts (or lean NOx traps, LNT) that were used in many earlier generation vehicles.

The 2016 was the fifth consecutive year of Pt deficit, driven by a strong demand from the automotive, industrial and investment sectors, which compensated for weakness in the jewelery sector. The autocatalyst demand for platinum was at an eight-year high last year, while industrial consumption also reached a five-year peak. Some of the key trends in the 2016 autocatalyst market highlighted by Johnson Matthey were:

Global demand for platinum has been at or above 8 million oz for the last four years—this figure includes about 3.3 million oz for autocatalysts—but is unlikely to remain at this level in 2017. While sales to some industrial consumers will remain strong, Johnson Matthey expects consumption of platinum in autocatalysts, jewelery and investment demand to fall this year. Together, these factors are predicted to have a significant impact on world platinum demand, which is forecast to fall by 8% to 7.61 million oz.

Global demand for platinum in autocatalysts is forecast to shrink by 5% to 3.16 million oz in 2017. Most of this decline will occur in the European light-duty diesel sector, as vehicle manufacturers begin to introduce catalyst systems that meet the next stage of European legislation. Known as Euro 6d-TEMP, these new regulations will be phased in from September 2017, and will mandate RDE testing for the first time: NOx emissions measured under real driving conditions must be less than 2.1 times those permitted during the laboratory test cycle used for type approval emissions testing. From January 2020, under the final phase of legislation, Euro 6d, this conformity factor is due to be tightened from 2.1 to 1.5.

The key trends predicted for the 2017 autocatalyst Pt market include:

The JM PGM Market Report also covers the palladium market. In 2016, the Pd market moved closer to balance—higher Russian supplies and weaker industrial demand reduced the Pd market deficit, despite a 23% rise in demand from Chinese automakers. In 2017, the Pd deficit is predicted to widen. World automotive demand is forecast to exceed 8 million oz for the first time, with further growth in world gasoline car production and tighter emission legislation in China, Europe and North America.

Source: Johnson Matthey