ADD China's comments on emmissions.:
Palladium Bucks Precious Metal Trend - Hits 18-Month High
"...While gold, silver, and platinum remain held in ranges, it appears China's NDRC comments on carbon emissions and improved energy efficiency have been taken seriously enough to drive Palladium prices to 18 month highs (and notably divergent from the rest of the PM group). Palladium is now up more than twice the 215% gain in gold since Lehman and leads the PMs..."
The implication is I guess that China will start manufacture more efficient Diesel engine powered vehicles instead of gas engines?Originally Posted by JohnQPublic
The implication I got was that people took seriously China's desire to enforce tougher emissions laws; this requiring more PGMs.
"...in 2010, China adopted the Euro IV emission standard, which is expected to materially increase the PGM loadings in Chinese-produced vehicles..."
Why Rick Rule Bought $280M Of Platinum And Palladium
"...RR: I expect a lot of volatility, mostly to the upside. The reason for this is simple: the industry does not earn its cost of capital. Look at South Africa, where the industry itself estimates it is $6 or $8 billion [$8B] behind in sustaining capital investments. As a result, the industry has not made the investments necessary to reach parts of the ore body that have not yet been accessed. This has manifested itself three ways. One, production cost goes up as a consequence of infrastructure-bound mines. Two, production declines. Finally, mine safety standards fall, which has manifested in increasing worker mortality in South Africa.
The South African platinum mining business is labor-intensive, not capital-intensive. And the working conditions and the pay workers receive are deplorable. Workers' wages have to go up, but cannot because the industry does not earn its cost of capital. Same thing for sustaining capital investments - there is no money. Finally, there is widespread political and social acceptance that the government's take by way of taxes, royalties and rents, has to go up.
If you take those three factors - deferred sustaining capital investments, increased worker compensation, and increased social take - the industry finds itself between a rock and a hard place..."
"...We do not have enough platinum to meet current Western demands, and demand will grow. Unless the Western economies drive off a cliff, we are due for a big rebound in automobile sales, which have been stalled since 2008. And when automobile demand increases, so does demand for catalytic converters.
Second, the Western world is clamoring for stricter emission standards for autos, refineries and chemical plants, all of which use platinum and palladium. Remember, it takes only $200 worth of platinum and palladium to give us the air quality we enjoy now in the Western world. But the real growth in the automobile market is in the frontier and emerging markets, in particular India and China.
Gasoline engines in China currently employ catalytic technology that uses less than 10% of the platinum and palladium loadings that Western vehicles do. As a partial consequence of that, air quality conditions in urban parts of China are deplorable. The Chinese government estimates that 500,000 Chinese die each year of cardiopulmonary illness as a consequence of very poor air quality standards. The Chinese government has proposed air quality standards over five years that would quintuple the loadings of platinum and palladium in gasoline engines in China.
The Chinese government has also asked the China National Offshore Oil Corp. to begin selling diesel at Western quality with regard to sulfur loadings that would permit the introduction of catalytic converters on diesel engines in China. These two things would represent an absolute sea change in platinum demand in a market that's already undersupplied..."
"...TMR: Technology and innovation seem to balance out when you have a sharp gap between supply and demand. Could technology develop an alternative to the traditional catalytic converter that does not rely on PGMs?
RR: I welcome that kind of development, but right now, platinum and palladium are so cheap relative to the effective job they do that there is no incentive for new technology. Over time, the markets will work in the platinum and palladium sector. The price will be high enough and people will be scared enough that we will find more of the metals. The problems in Russia, South Africa and Zimbabwe will sort themselves out over the next 10 or 15 years.
This thesis plays out in a 1-5-year timeframe, and I do not see anything that would derail it, with the exception of a 2008-style liquidity event that destroys Western demand..."
gunDriller (9th April 2013),steel_ag (20th May 2013)
3/26/2013 @ 2:05PM |302 views
FOCUS: Platinum, Palladium Show Divergence; Reflects Fundamentals
"...Platinum and palladium prices are off their 2013 highs, as worries about the health of the eurozone have weighed on prices, but whereas platinum prices have seen losses nearing double-digit levels, palladium is holding not from its yearly top..."
"...Platinum, meanwhile, is suffering from weaker auto demand in Europe, Steel said. Auto sales in Europe have slumped because of the recession there and it’s hitting platinum because of the metal’s use in diesel engines for pollution control. In January, new car registrations in Europe fell by 8.7% year-over-year to 885,159 units, a historical low since the data started being collected in 1990.
Palladium, on the other hand, is used more in gasoline-powered engines that are popular in North America and China, and that is another factor underpinning palladium, Steel said.
“Unless there’s a real slowdown in China, it shouldn’t affect palladium and there’s no sign of (a slowdown),” Steel said.
Platinum’s best hope to see prices rise is the potential of a slowdown in mining that come as a result of labor strikes in South Africa, Steel said, although there are so far few signs of that happening. These strikes affect platinum more than palladium, he added..."
"...“The metal [Pd] most susceptible to further liquidation remains palladium, given that net non-commercial length as a percentage of open interest is very high at 71%. This is less the case with platinum, where net length as a percentage of open interest stands at 53%, although we cannot exclude further slippage,” she said..."
Pd has held up remarkably well in the last month of PM onslaught. $739 right now!
I was going to comment. Silver and gold are getting pushed down, but Pd is holding well (Pt is doing ok, also). A lot of people believe the economy is improving, apparently (and that there is excess silver).
Pd still the leader of the pack. This has been consistent through drops, rises, etc. recently.
it's from comets. that's why i can never sell it. how cool is it to have pieces of comets laying on your desk?
The center of earth has a fair bit of Platinum group metals allegedly, but it will never reach the crust... I think the source of most Pd on earths surface is from the smashed up planet between Mars and Jupiter.
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