Hydrogen vehicles will be the biggest source of platinum demand by 2030 — WPIC’s Edward Sterck

Challenges with mine supply in South Africa, by far the world’s largest platinum producer, should support prices for the auto catalyst metal, says Matt Watson, founder of Precious Metals Commodity Management LLC.

On June 5 Watson recorded an episode of Green Rush with guest Edward Sterck, director of research, World Platinum Investment Council (WPIC).

Watson referenced a chart showing platinum supply decreasing to 2030, as operational expenditures rise and miners close unproductive shafts. “We’re heading into a zone where we’re going to be in a structural deficit going forward,” he said.

Sterck agreed, stating that “it’s just fundamentally the combination of mine and recycling supply continuing to run short of demand.” The WPIC projects a negative 1.2 percent CAGR for ICE (internal combustion engine) auto catalyst demand between now and 2028. Continuing into the 2030s, hydrogen vehicles will become the biggest end source of platinum demand.

Events like “Diesel-gate” have stunted the demand for diesel vehicles. Sterck noted diesel’s market share has declined from 50 percent in 2015 to around 17 percent today. Higher emissions standards have increased PGM loadings per vehicle.

Watson said he worries there won’t be enough platinum to meet the demand for the hydrogen economy, forecasting 3.5 to 4 million ounces of platinum available, against 13 million ounces of PGMs that currently go into the automotive market.

Sterck put the number of available ounces higher due to recycling, mostly from end-of-life auto catalysts and jewellery made from platinum. The WPIC sees hydrogen demand for platinum growing to 900,000 ounces from 100,000 oz currently.

Sterck noted that with subsidies, heavy-duty hydrogen vehicles reach cost parity with diesel-fueled heavy-duty vehicles by 2030. However, US subsidies are lower, therefore, “we don’t really have a huge amount of hydrogen demand for platinum in our base-case forecasts coming from North America. It’s really a China and a Europe story.”

Listen to Kitco Mining’s Green Rush to understand and profit from a once-in-a-century event: the clean energy transition.

Each week, host Matt Watson, founder of Precious Metals Commodity Management, will take a deep dive into a metal that will underpin our new electrified world. Green Rush explores the vital role of nickel, copper, lithium, cobalt, silver, platinum group metals, rare earth elements and other metals that power the batteries driving our sustainable future.

0:00 World Platinum Investment Council
2:41 PGM price challenges
4:12 Platinum market
6:38 Auto catalyst PGMs
7:39 Loadings increase
11:23 Lost decade
14:40 South African production decline
16:06 How to grow platinum supply
20:09 Palladium challenge
21:53 End-of-life vehicle shortage
26:14 The hydrogen economy
30:48 Platinum investment demand growth in China

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