From AFR.Platinum demand set to rise if car makers dump Russian...

From AFR.

Platinum demand set to rise if car makers dump Russian palladiumBloombergShare postRussia’s invasion of Ukraine could lead to a significant increase in platinum demand as car makers substitute the metal for palladium in autocatalysts, according to the World Platinum Investment Council.That could generate as much as 400,000 ounces of additional demand in the next year if car makers aggressively accelerate substitution in light of the war, according to Trevor Raymond, director of research at WPIC. Russia produces 40 per cent of freshly mined palladium, and Western companies are increasingly shunning its exports.While palladium is preferred for use in catalytic converters that curb pollution in gasoline cars, it is increasingly being substituted by cheaper sister metal platinum. Palladium surged to a record on Monday, making it almost triple the price of platinum. WPIC already sees 340,000 ounces of palladium being replaced in 2022, a 70 per cent increase on last year.Western sanctions could prompt car makers to stop using Russian palladium in catalytic converters and replace it with platinum. AP“Small changes in substitution can make a huge difference to platinum demand,” Raymond said in an interview. “It just depends on the attitude of the automakers.”The rise in substitution may partly explain a boom in Chinese platinum imports last year, which far outstripped identifiable demand for the metal and entirely absorbed its surplus, according to WPIC. Higher loadings in heavy-duty vehicles and a build-up of stock by speculators and manufacturers may also have contributed, it said.Meanwhile, gold held near a 19-month high following a ban on Russian oil imports, as mounting concerns over inflation and economic growth boost demand for the haven asset.Bullion has gained 12 per cent in 2022 and is closing in on a record as investors seek a store of value amid the threat of an inflationary shock to the global economy. Holdings in gold-backed exchange-traded funds have climbed to the highest since March 2021, with inflows of about 152 tonnes this year, according to initial data compiled by Bloomberg.The impact of the war in Ukraine and sanctions on Russia have reverberated across the globe, driving commodities higher on supply woes. The latest move by the US and Britain to ban Russian oil imports has stoked further fears over intensifying price pressures as costs of raw materials such as food, energy and metals costs surge