There is no more Palladium

[motocat]

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.

[yellowsnow]

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.

[yellowsnow]

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

[motocat]

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?

[PGMaster]

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

[motocat]

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?)

[yellowsnow]

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.

[PGMaster]

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.

So there are a few factors at play. One key thing to remember is that a doubling of palladium prices (even from current levels) only adds about $200 to the cost of the car, so the incentive to switch isn't as massive as it's made out to be (but the incentive is there, it's just a matter of time in my opinion).

Another key consideration is that catalytic converters and emission treatment systems are a lot more complex than they were in the past, and have been optimised for Pd use (so without a lot of R&D, you're not going to get similar levels of performance with a 1:1 platinum-palladium switch). The R&D spend is going to be significant, it's my view that automakers don't want to be the sucker who switches first and helps balance the market for their competitors - also if everyone independently switched we'd be in a position where the platinum market would be in a major deficit (not as big of a deal, however, as there are plentiful above-ground stocks). Also, carmakers R&D budgets are tied up in electric vehicle research - with petrol and diesel vehicles futures very uncertain beyond the medium term.

Further hampering a switch is that carmakers risk having to perform super expensive recalls if the longevity of these platinum catalysts turns out to be sub-par.

But I do think that the switch will occur soon at some level (likely by reducing already-low palladium loadings in diesel cars, and substituting small volumes of palladium in larger-engined petrol cars - where the engine runs cooler and the longevity of the catalytic converter's performance is less in question. Especially when above-ground vaulted supply starts to dry up.

Final point: It's not really possible to replace rhodium economically (even at current ridiculous prices) with platinum or palladium. Pt and pd are oxidation catalysts, whereas rhodium is a super efficient reduction catalyst - this makes it super effective at reducing NOx emissions (though there is some substitution pressure from ammonia-based emission treatment systems that are effective at reducing NOx).

PS: These are just the basics - I've glossed over a lot of points; but I wouldn't have a job if I told you everything

[yellowsnow]

So there are a few factors at play. One key thing to remember is that a doubling of palladium prices (even from current levels) only adds about $200 to the cost of the car, so the incentive to switch isn't as massive as it's made out to be (but the incentive is there, it's just a matter of time in my opinion).

Another key consideration is that catalytic converters and emission treatment systems are a lot more complex than they were in the past, and have been optimised for Pd use (so without a lot of R&D, you're not going to get similar levels of performance with a 1:1 platinum-palladium switch). The R&D spend is going to be significant, it's my view that automakers don't want to be the sucker who switches first and helps balance the market for their competitors - also if everyone independently switched we'd be in a position where the platinum market would be in a major deficit (not as big of a deal, however, as there are plentiful above-ground stocks). Also, carmakers R&D budgets are tied up in electric vehicle research - with petrol and diesel vehicles futures very uncertain beyond the medium term.

Further hampering a switch is that carmakers risk having to perform super expensive recalls if the longevity of these platinum catalysts turns out to be sub-par.

But I do think that the switch will occur soon at some level (likely by reducing already-low palladium loadings in diesel cars, and substituting small volumes of palladium in larger-engined petrol cars - where the engine runs cooler and the longevity of the catalytic converter's performance is less in question. Especially when above-ground vaulted supply starts to dry up.

Final point: It's not really possible to replace rhodium economically (even at current ridiculous prices) with platinum or palladium. Pt and pd are oxidation catalysts, whereas rhodium is a super efficient reduction catalyst - this makes it super effective at reducing NOx emissions (though there is some substitution pressure from ammonia-based emission treatment systems that are effective at reducing NOx).

PS: These are just the basics - I've glossed over a lot of points; but I wouldn't have a job if I told you everything

well, nothing you said are new here, what u said here were posted by me in previous posts and/or other threads. I even claimed in prior posting a price of Pd at 1.8X of Pt is the cost parity between the 2 metals for catalytic purpose. Pd spot above 1.8x Pt mean Pt beat Pd in cost advantage, not including Pt is a better catalyst than Pd.

Pt is superior to Pd as a auto catalyst. Re-engineering cost is minimal since Pt was used a lot before Pd came along, it is not like re-inventing the wheel.
The real cost is not re-engineering but for testing and re-certification. You said Pd cost inflation is minimal on each catalyst but if they had started the conversion back to Pt sooner, every dollar save would rack up a lot by now. A day delay is money lost. It is clear the switch to Pd saw only a short term cost benefit. Had they stayed with Pt, the cost saving would far exceed the short term saving going to Pd.

[DutchSilver]

Dump it ..ugly metal anyway!

Pt is the next moon metal