“Those of you who want to ‘speculate’ or invest in platinum and palladium can, besides physical ownership of coins and bars, buy futures in London, New York, and other markets. The futures markets have the advantage of being very liquid.” — Jack LiftonThe principal Platinum Group Metals (pPGMs), the platinum, palladium, and rhodium are among the most critical of the critical metals that support our health and well-being. This is for two reasons: First of all, the electronic properties of the pPGMs cannot be duplicated by any other known less expensive or more effective substitution, and second, the pPGMs are very rare. The total annual production of all three combined does not exceed 500 tons. The overwhelming use for these PGMs is as the active agents (catalysts) in automotive exhaust emission catalytic converters, in which they catalyze the complete combustion of hydrocarbon fuels (gasoline, kerosine [diesel fuel]), and the reduction of acid forming nitrous oxides to inert nitrogen. Catalytic converters cannot function economically or efficiently without PGMs, so that the rarity of the PGMs ensures that they are among the most recycled industrial metals, since the total annual new production of platinum and palladium is insufficient to meet demand.It should be noted that the current annual production for the US OEM automotive industry alone uses 200 mta of PGMs for catalytic converters. Yet the US industry produces only 20% of global automobiles and trucks. Both China and Europe produce more cars annually than the US, and until recently the use of pPGMs in Europe by the OEM automotive industry there used a large enough amount of platinum to severely skew its price relationship to that of palladium creating a palladium shortage that has driven up palladium’s price to more than double that of platinum, a historically unusual situation. QUOTE Volatile year ahead in 2021 IMO.
