Speed bumps ahead for PGMs
How big is the threat battery electric vehicles hold for these metals? And how will the outlook change with the new extended-range models now hitting the road?
Commodity supply-and-demand analysis often resembles a Rorschach test, with both bullish and bearish investors finding patterns in the data to support their theses. This in turn causes price volatility as the two camps battle for control of the narrative.
The platinum group metals (PGMs) sector is no different. Though it’s widely accepted that the battery electric vehicle (BEV) revolution will reduce the demand for autocatalysts and their associated PGM loadings, there’s wide divergence on how this will play out over the short to medium term. (PGM loadings are used to reduce the harmful pollutants in exhaust gases that are produced by internal combustion engines — ICEs for short.) As autocatalysts represent roughly 85% of palladium and rhodium demand and 45% of platinum demand (which are the three main metals), determining the likely path is exceedingly important...
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