Strong metal demand and increased auto recycling have pushed up amounts of platinum and palladium recovered from used catalytic converters, and this supply should grow in the future, analysts said this week, according to Reuters.
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Gleaning platinum group metals from old catalysts has become especially key for the market these days due to finely balanced supply and demand fundamentals and rising metals prices, the news agency noted.
Reuters said more PGM-laden converters are entering the supply chain because of greater vehicle production in recent decades. Metal loadings per unit are also higher than in past years, so more recoverable metal is available.
“The autocat scrap market is going to continue growing because, as time marches on, more converters are coming off the market,” James Verraster, president and chief executive of Auramet Trading, a physical trading, merchant banking and risk management firm in New Jersey, told the news agency.
“This is not affecting prices much, because PGM prices continue to go up dramatically,” he said.
“Even with the increase in the recoverable metal, it is not enough to feed the demand, and that’s why prices continue to go higher.”
Reuters noted that physically scarce platinum soared to an all-time peak of $US1,336 an ounce on Wednesday.
Platinum recovered from scrapped catalysts worldwide rose by 12%, or 80,000 ounces, to 770,000 ounces last year, Johnson Matthey , the world’s largest platinum distributor, said in a report this week, according to Reuters.
At the same time, purchases of platinum by the autocat industry surged by 330,000 ounces to a new high of 3.82m ounces, boosted by tighter emissions rules, a robust light-duty diesel sector in Europe and rising Chinese auto production.
“Scrap yards and collectors continued to maximise the recovery from catalysts from vehicles, spurred by higher platinum prices,” Matthey reportedly said in the report.
But the increase reflected the changing mix of vehicles and, therefore, catalyst systems, entering scrap yards.
While palladium is the main catalyst in vehicles with petrol engines, such as those making up most US auto production, platinum mostly is used for diesels, which are popular in Europe.
Recovery grew in North America and Europe as vehicles from the 1990s entered breaking yards, but it fell in Japan as used vehicle exports increased.
Platinum autocat demand was certain to cross 4.0m ounces in 2006, from 3.8m last year, Matthey said, according to Reuters, fuelled by expanding output and sales of diesel vehicles in Europe.
About two-thirds of vehicles scrapped these days are between 10 and 16 years old, metals research firm GFMS said in a report last month.
GFMS said palladium’s surging usage in catalyst production during the 1990s has only just begun to come into play in recycling, and its recovery will rise sharply in the next several years, Reuters added.
But, by 2010, the global pool of autocats will contain much more platinum from the surge in diesel productions after 2000, said GFMS.
Palladium from scrapped catalysts in 2005 rose 19% to 630,000 ounces, according to Johnson Matthey, Reuters said. Purchases of palladium for autocats rose by 20,000 ounces to 3.81m ounces.
Overall demand could flatten out in 2006, after three years of gains, but supply should be steady or lower, so the amount of recovered auto scrap going ahead would be crucial, the report added.
