IT was important to rebalance the platinum group metal (PGM) market in order to prevent the industry losing industrial demand permanently.
This is the view of Sibanye-Stillwater which today announced with Impala Platinum (Implats) their joint sponsorship of new autocatalyst technology developed by German chemicals giant, BASF.
The technology, known as tri-metal catalyst, would rely on greater use of platinum and allow original equipment manufacturers (OEMs) to substitute palladium with platinum. The palladium market is in a significant supply deficit – a situation that will most likely worsen short-term following technical disruptions at the facilities of Anglo American Platinum.
James Wellsted, a spokesman for Sibanye-Stillwater, said the risk of allowing a supply deficit for an extended period is that OEMs might well engineer an alternative technology that would rely less on PGM supply.
The tri-metal catalyst was described as “…a partial substitution of high-priced palladium with lower-priced platinum in light-duty gasoline vehicles”. This would be achieved without compromising emissions standards, said BASF in a statement.
“Adoption of the Tri-Metal Catalyst can reduce catalytic converter costs for automakers and partially rebalance market demand for PGMs, thereby enhancing PGM market sustainability,” it said.
“The longer the deficit exists the greater the risk that fabricators are forced to change,” said Wellsted.
The development of the catalyst is considered a better use of market development funds than investing in promoting platinum investments. “By developing the platinum market you will create demand and improve its price and that will attract investment,” he said. Sibanye-Stillwater controversially withdrew from the World Platinum Investment Council last year, saying marketing platinum as an investment product wasn’t the right approach when there was a market surplus for the metal.
The possibility that platinum may be in the foothills of a price recovery was a feature of the WPIC’s 2020 overview in which it forecast a 680,000 ounce swing in the metal’s surplus over two years. The surplus was expected to be a modest 119,000 oz this year which compares to the 790,000 oz surplus of 2018.
The big question on everyone’s lips in the platinum sector is when automakers will begin the switch to platinum autocatalysts in response to the significant palladium deficit which has also had a knock-on effect in the price of rhodium.
“The ongoing unavailability of palladium has become more pronounced into 2020, increasing further the likelihood of platinum demand growth as it substitutes for palladium in autocatalysts,” said the WPIC.
A response of automakers is that they have increased the number of diesel hybrid models with low noxious emissions. “Higher platinum loadings per vehicle support increased platinum demand in 2020,” said the WPIC.
Platinum group metal mining executives such as Neal Froneman of Sibanye-Stillwater and Anglo American Platinum’s outgoing CEO, Chris Griffith, have commented on the possibility of substitution of palladium with platinum in autocatalysts saying it was likely to occur, although they differ on timing.