Platinum, palladium and rhodium in short supply – Johnson Matthey

Reuters | February 11, 2021 | 9:45 am Intelligence Markets Palladium Platinum Rhodium

Platinum price slumps to 7-month low as virus spread saps demand

Catalytic converter contain precious materials including platinum, rhodium and palladium. (Image from Wikimedia commons)

Platinum, palladium and rhodium used by the auto industry to filter emissions from engine exhausts were all in short supply last year, data from specialist materials firm Johnson Matthey showed on Wednesday, as prices for the metals soared.

Supply shortfalls have driven rapid price gains, with platinum trading at six-year highs and rhodium and palladium close to record levels.

A shortfall is expected for palladium and rhodium this year as well, the third consecutive annual deficit for rhodium and the tenth for palladium, Johnson Matthey researcher Rupen Raithatha said.

Platinum may see a third consecutive annual deficit in 2021, depending on how much metal is stockpiled by investors, he said.

All three metals are used in catalytic converters to reduce harmful emissions

All three metals are used in catalytic converters to reduce harmful emissions, and tightening environmental regulation is forcing auto makers to put more into each vehicle. Platinum is also in demand by other industies, for jewellery and as an investment.

Johnson Matthey is a leading autocatalyst manufacturer.

It said the 7 million-8 million ounce a year platinum market was undersupplied by 390,000 ounces in 2020 after a shortfall of 301,000 ounces in 2019.

The 10 million ounce a year palladium market saw a shortfall of 606,000 ounces, down from 893,000 ounces in 2019. The 1 million ounce rhodium market was undersupplied by 84,000 ounces last year, up from 38,000 ounces in 2019.

The company said its numbers for 2020 were preliminary estimates.

Both demand and supply were curtailed by the coronavirus pandemic, which disrupted mining and recycling and depressed industrial activity and vehicle and jewellery sales.

Supply was particularly hard hit due to the closure for several months of a major processing plant run by Anglo American Platinum (Amplats) in South Africa.

Raithatha said he expected both supply and demand to bounce back strongly this year as the virus is contained.

He said around 1 million ounces of unprocessed inventory had built up while the Amplats plant was closed which would be worked through during 2021 and 2022, adding to supply.

(By Peter Hobson; Editing by Jason Neely and Elaine Hardcastle)