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Thread: There is no more Palladium

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  1. #1

    Default There is no more Palladium

    An almost $200 gain in Palladium in about an hour. Did a quick google search for a reason and found this: https://www.reuters.com/article/us-p...KBN1ZG1T6?il=0

    These catalyst producers who now are buying platinum at some 2.5K for their product must have some of the most extremely incompetent planners. Are they still saying "retooling" to platinum is to expensive? If they say this long enough, palladium will be as expensive as rhodium. Heads in the sand? Maybe I should get into the catalytic converter for autos business, seems as though the competition is very easy, riches await.
    Last edited by motocat; 01-17-2020 at 10:56 AM.
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  2. #2

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    Quote Originally Posted by motocat View Post
    An almost $200 gain in Palladium in about an hour. Did a quick google search for a reason and found this: https://www.reuters.com/article/us-p...KBN1ZG1T6?il=0

    These catalyst producers who now are buying platinum at some 2.5K for their product must have some of the most extremely incompetent planners. Are they still saying "retooling" to platinum is to expensive? If they say this long enough, palladium will be as expensive as rhodium. Heads in the sand? Maybe I should get into the catalytic converter for autos business, seems as though the competition is very easy, riches await.
    melting point
    Pd 1555 C
    Pt 1768 C
    Rh 1964 C

    Pt is slightly higher melting point than Pd but lower than Rh, I can't see the difficulty of switching Pd to Pt.
    Auto makers are very short term thinkers. If they can save 2 cents on a component they will use the 2 cent less inferior component.
    Last edited by yellowsnow; 01-17-2020 at 03:15 PM.

  3. #3

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    outside of Russia, most Pd come from as by product of Pt mining.
    Since Pt price is too low, there were some closing of Pt mines, aggravating the Pd supply problem

  4. #4

    Default

    Quote Originally Posted by yellowsnow View Post
    outside of Russia, most Pd come from as by product of Pt mining.
    Since Pt price is too low, there were some closing of Pt mines, aggravating the Pd supply problem
    This from an article I linked to earlier:



    South Africa produces about as much Pd as Russia, and the rest of the world combined is also big. With Pt, South Africa produces more than the rest of the world combined. That article I linked to argues the more varied source of Pd had the catalytic converter manufacturers feel safer about being reliant on Pd. Myself, I think a smart manufacturer would have had two production methods, on using Pd and one using Pt such that they could primarily use whatever would be cheaper. If I had been their adviser, that's what I would have recommended, but unfortunately, there are many poor decision makers 'round the world, just hope the free market can sort it out, the big unknown being, just how free is it?
    Last edited by motocat; 01-17-2020 at 05:14 PM.
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  5. #5

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    Those 2018 estimates are far off what actually occurred...

    But yes, you're not wrong in that low platinum prices are hindering a ramp-up in SA palladium production. There are 3 "reefs" targeted by miners in the country, the UG2 reef has high rhodium content (about 10%), but low palladium, so to capitalise on high rhodium prices you'll further flood the platinum market and not benefit much from high palladium. Then you have the Merensky reef, where platinum dominates (about 65%, with palladium at about 30% and rhodium 5%) - so also here increasing production to take advantage of high rhodium/palladium prices will flood the platinum market even more. Then there is the Platreef which is the source of most new ounces - this has about an equal spread of platinum to palladium (with palladium just outwighing), but dismal rhodium grades - so also here it's hard to balance the palladium market without under-producing rhodium. So supply out of SA is difficult to be used to balance the palladium market without decimating platinum revenues or underproducing rhodium. Recycling may help, however, as the gasoline cars being scrapped currently should have considerably lower platinum than palladium, but probably not enough rhodium (in line with historic loading trends). Demand is going to have to respond to balance the market, but when autocatalyst manufacturers switch is super uncertain.

    Production volumes for reference, as per Johnson Matthey (http://www.platinum.matthey.com/docu...ruary_2020.pdf):
    PlatinumMined.gif
    PalladiumMined.gif
    RhodiumMined.gif
    Last edited by PGMaster; 02-20-2020 at 01:11 AM. Reason: Fixed hyperlink

  6. #6

    Default

    Quote Originally Posted by PGMaster View Post
    Those 2018 estimates are far off what actually occurred...

    But yes, you're not wrong in that low platinum prices are hindering a ramp-up in SA palladium production. There are 3 "reefs" targeted by miners in the country, the UG2 reef has high rhodium content (about 10%), but low palladium, so to capitalise on high rhodium prices you'll further flood the platinum market and not benefit much from high palladium. Then you have the Merensky reef, where platinum dominates (about 65%, with palladium at about 30% and rhodium 5%) - so also here increasing production to take advantage of high rhodium/palladium prices will flood the platinum market even more. Then there is the Platreef which is the source of most new ounces - this has about an equal spread of platinum to palladium (with palladium just outwighing), but dismal rhodium grades - so also here it's hard to balance the palladium market without under-producing rhodium. So supply out of SA is difficult to be used to balance the palladium market without decimating platinum revenues or underproducing rhodium. Recycling may help, however, as the gasoline cars being scrapped currently should have considerably lower platinum than palladium, but probably not enough rhodium (in line with historic loading trends). Demand is going to have to respond to balance the market, but when autocatalyst manufacturers switch is super uncertain.

    Production volumes for reference, as per Johnson Matthey (http://www.platinum.matthey.com/docu...ruary_2020.pdf):
    PlatinumMined.gif
    PalladiumMined.gif
    RhodiumMined.gif
    Given how valuable palladium and particularly rhodium (now over 12K) have become, you would think it still would be worth it. Why can't they just stockpile the platinum, to sell when the switch back from palladium to platinum in cats' happen? (Or is there a reason you know why this won't happen?)
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  7. #7

    Default

    Quote Originally Posted by PGMaster View Post
    Those 2018 estimates are far off what actually occurred...

    But yes, you're not wrong in that low platinum prices are hindering a ramp-up in SA palladium production. There are 3 "reefs" targeted by miners in the country, the UG2 reef has high rhodium content (about 10%), but low palladium, so to capitalise on high rhodium prices you'll further flood the platinum market and not benefit much from high palladium. Then you have the Merensky reef, where platinum dominates (about 65%, with palladium at about 30% and rhodium 5%) - so also here increasing production to take advantage of high rhodium/palladium prices will flood the platinum market even more. Then there is the Platreef which is the source of most new ounces - this has about an equal spread of platinum to palladium (with palladium just outwighing), but dismal rhodium grades - so also here it's hard to balance the palladium market without under-producing rhodium. So supply out of SA is difficult to be used to balance the palladium market without decimating platinum revenues or underproducing rhodium. Recycling may help, however, as the gasoline cars being scrapped currently should have considerably lower platinum than palladium, but probably not enough rhodium (in line with historic loading trends). Demand is going to have to respond to balance the market, but when autocatalyst manufacturers switch is super uncertain.

    Production volumes for reference, as per Johnson Matthey (http://www.platinum.matthey.com/docu...ruary_2020.pdf):
    PlatinumMined.gif
    PalladiumMined.gif
    RhodiumMined.gif
    the whole point of auto catalytic converter makers switched to Pd from Pt was lower cost and perceived supply risk of Pt.
    Since the real picture is crystal clear now, Pt is cheaper and less supply risk than Pd, I just don't understand why the switch back is not happening.

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