Platinum and Palladium Making Platinum and Palladium Plays in 2021
Platinum and palladium are incorporated by automakers in catalytic converter manufacturing to clean greenhouse exhaust fumes. Axi chief global market strategist Stephen Innes argues that with consumers looking at more single-family vehicles over public transport, platinum group metals will benefit from the recovery in global automobile sales, tightening emission standards, and strong Chinese imports, Reuters reports.
Economists and market analysts argue that a Biden administration will contribute to tighter environmental regulations and a focus on green energy technology, which may mean tighter regulation on car emissions and increase demand for palladium and platinum in catalytic converters.
Car catalyst demand jumped over the past couple of years due to stricter emissions regulations across Europe and China’s plans to toughen standards in a bid to reduce smog. Catalytic converters help diminish toxic emissions and produce carbon dioxide, water, and nitrogen.
The return to lower interest rates around the world has also continued to support demand for physical assets, which tend to exhibit an inverse relationship to interest rates since investors are less apt to hold raw materials when bonds offer higher yields in a rising rate environment.