As we step into 2024, the Precious Group Metals (PGM) market, comprising Platinum, Palladium, and Rhodium, is poised for significant changes. For those who were hoping for a Platinum Group Metals (PGM) market rally in 2024 had their hopes dashed on 9th January when Palladium price fell below $1000/oz for the first time since 2018. These metals, crucial in the manufacturing of catalytic converters, are facing a dynamic shift in their supply and demand, impacting prices and the recycling industry. Let’s delve into the 2024 forecast for these metals and what it means for catalytic converter recycling.
Platinum Outlook
The deficit in platinum supply is expected to persist into 2024. The Heraeus Precious Forecast anticipates a shortfall of 445 kilo ounces, with a global demand soaring to 7.5 million ounces. However, challenges like potential mine closures and a reduction in output in South Africa, coupled with limited secondary supply due to high vehicle prices and semiconductor shortages, cast a shadow over availability.
However, the demand for platinum in autocatalysts or catalytic converters remains steady, suggesting a continued reliance on this metal in the automotive industry. With prices projected to range between $800 and $1,100 per ounce, the recycling industry needs to brace for a volatile market influenced by economic and geopolitical factors.
Palladium Prospects
Palladium faces a significant deficit, attributed to a subdued secondary supply from recycling and a slight improvement in primary supply. The automotive sector, a major consumer of palladium, is expected to reduce its demand by 3%, primarily due to the increasing adoption of electric vehicles and the substitution of palladium with platinum.
The Heraeus report forecasts palladium prices to range between $700 and $1,200 per ounce. This pricing trend, combined with the market shift towards electric vehicles, presents challenges for recyclers who have come to rely heavily on palladium recovery.
Rhodium – A Slight Shift:
Rhodium, though forecasted to be in a slight deficit, will experience minor changes in supply and demand. The automotive demand for rhodium is predicted to decrease slightly, influenced by the adoption of Battery Electric Vehicles (BEVs) and thrifting practices. However, the price is expected to remain relatively high, ranging from $3,500 to $6,500 per ounce, keeping it a valuable commodity for recycling.
Implications for Catalytic Converter Recycling
- Supply Challenges: High vehicle prices and weak economic growth may limit the supply of spent catalytic converters for recycling, and thus keeping prices higher than their inherent value. The scarcity could potentially increase the cost of recycled materials, affecting the profitability of recycling businesses across the industry. The only way to overcome this challenge is to know the actual PGM content of the makes and models that you are buying so that you can make an informed decision and avoid overpaying. You can send us samples for detailed and precise analysis of any make and model. Simply send a request here.
- Price Volatility: The fluctuating prices of these metals, particularly the decrease in platinum and palladium, might challenge the financial viability of recycling converters. To maintain profitability, we have to look into recycling other precious metals, improve recycling process, raise productivity as well as explore upstream and downstream opportunities.
BR Metals is also recycling gold, silver, platinum from different waste sources. To find out more about our recovery services, visit here.
- Automotive Industry Trends: The shift towards electric vehicles and the changing preferences in catalytic converters materials (like platinum for palladium substitution) will alter the demand for recycled materials. We need to adjust our strategies to align with these evolving trends.
- Economic Influences: The global economic slowdown and industrial demand shifts could impact the supply chain for recycled materials. Recycling operations need to stay informed and agile to navigate these macroeconomic changes.
Conclusion:
The year 2024 brings with it a wave of changes in the PGM market, directly influencing the catalytic converter recycling industry. With the predicted deficits, changing demand dynamics, and economic uncertainties, recyclers are facing a challenging yet opportunistic landscape. To thrive, we must remain adaptable, innovative, and responsive to the evolving market conditions. As we move forward, the resilience and flexibility of the recycling industry will be key to navigating the future of catalytic converter recycling amidst the fluctuating PGM market.
