Does Platinum Have a Future with the Rise of Electric Vehicles
Over 40% of platinum is used in the manufacturing of automotive catalytic converters. With the introduction of electric vehicles (EVs), many reports are pointing towards a marked decrease in platinum demand and falling prices in the mid to long- term.
So how far will the once mighty platinum fall?
To better predict what the future holds, let’s first take a look at other uses of platinum across various industry sectors.
Besides auto-catalysts, the physical properties of platinum make it suitable for a wide range of applications, from jewellery, aviation, electronics, to industrial and even in the medical field.
Below is a breakdown of its common uses and applications:
All that glitters is not gold. It could be platinum, which is overtaking gold as the jewellery of choice amongst the millennial crowd and affluent middle-class.
Coveted for its rarity, purity, luster, and wear-resistant properties, jewellery contributes to the second-largest source of global platinum demand, which stands at approximately 32% in 2017.
Experts have predicted that China’s untapped potential can bring the market total to 5,000koz, more than 3 times its current demand, while India is projected to hit 500koz by 2020.
Platinum also has a number of applications in electronic devices and components due to its durability, oxidation resistance, high temperature stability and electrical conductivity.
It has since found its way into capacitators, electrodes and other components in mobile devices, computers, broadcasting equipment, high-voltage circuits and other electronic devices as well.
While electrical applications made up a modest 150koz of platinum demand in 2017, the sector is expected to receive a boost from growth in consumer electronics and robotics & automation in industrial settings.
Having excellent catalytic properties, hardness, a high melting point and resistance to oxidation make platinum suitable for a myriad of industrial applications.
In the agricultural sector, platinum is used as a catalyst to convert ammonia into nitric acid, which is then used in the production of agricultural fertilizers. As the global population reaches towards 9 billion by 2040, more food will be needed to support the population. More fertilizers will be required to produce higher crop yields.
The phenomenal growth in mobile devices worldwide is set to spur demand for platinum too. Due to its high melting point (1,768°C), the metal is used in the precision equipment that manufactures high-purity glass for the screens on mobile devices and laptops.
The petroleum refining industry has also been using platinum as a catalyst to produce components for high-octane gasoline since the 1950s. Industry insiders project that the 2040 global car population will double 2016’s to reach 2-billion, of which only 35% are EVs. If this forecast holds true, platinum demand in petroleum refining is unlikely to soften even with the growing popularity of EVs.
Platinum has a host of medical applications due to its durability, electrical conductivity and hypoallergenic quality. It is usually found in equipment and devices that are inserted or have to stay inside a patient’s body or organ, like catheters, guidewires, defibrillators, pacemakers, stents and even aural, retinal and dental implants.
Cancer treatment drugs also use platinum compounds to inhibit cancerous cells from multiplying, while platinum implants with iridium isotopes are used to kill cancerous cells in radiotherapy.
By 2035, global cancer cases are projected to increase to 24 million cases, up from 14.1 million in 2012. This will ultimately increase platinum demand in the medical sector. Bad news for the human race but good news for platinum investors.
So what does the future holds?
Given the largely positive predictions, the outlook for platinum could be brighter. This is because these predictions are also highly dependent on other variables, many of which can have a profound impact on platinum demand. These include but not limited to the actual adoption rate of EVs globally, platinum usage substituted due to technological advancements, new applications for platinum, disruption to current supply and demand dynamics, etc. Hence, only time will unravel how all these varying factors will shape platinum demand in a post catalytic converter future.
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