CAPE TOWN (Business Day) -- High oil prices were expected to spur more interest in diesel vehicles in the U.S., which would spur the platinum market as the precious metal was used in emission control devices, Anglo Platinum (Angloplat) said yesterday.
“I do believe that diesel is going to get its place in the sun also in the U.S.,” said Angloplat CE Ralph Havenstein.
“That will certainly be very good for especially platinum and also rhodium demand going forward to maintain the (price) levels where we are.”
Angloplat [JSE:ANANP], the world’s biggest platinum producer, is majority owned by mining company Anglo American [NASDAQ:AAUK].
The two main uses of platinum are in the car industry for making catalysts, which help clean pollutant exhaust fumes, and in jewellery.
Catalyst emission control devices in vehicles that use cheaper diesel need more platinum group metals than conventional fuel vehicles.
High oil prices may curb economic activity in the short term, but in the long term they were positive for platinum, which provided “efficiency solutions” including diesel cars and, further in the future, fuel cells, Havenstein said.
“I think that (diesel sales) will certainly accelerate if we see oil prices, or at least the expectation of oil prices, to remain at the levels where they are now,” Havenstein said.
Strong growth in diesel vehicle sales in Europe, however, was expected to level off since refineries in the region might be unable to provide enough fuel, he said.
“If you look at Europe, there I think we are reaching close to the maximum of diesel penetration in that market,” Havenstein said. “We do expect some growth to continue there, but there is a limit to that, therefore the importance of the U.S. market is really good.”
Platinum purchases by global car makers for use in autocatalysts rose 7%, or 240,000 ounces, to 3.51-million ounces last year, thanks to strong European diesel car sales and stricter diesel emissions rules, refining and chemical company Johnson Matthey said in May.
He said jewellery demand for platinum was robust, with Chinese buyers supporting the price when it fell to $880/oz. With Reuters
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