Platinum vs Palladium.

Doing some calculations, using palladium in a catalytic converter cost about 30% more then using platinum. (in raw materials)

Based on these prices in USD; Rhodium $7700, Palladium $2000 and Platinum $950. Using these ratios (Palladium/ Rhodium is 7 : 1) and (Platinum/ Rhodium is 5 : 1)

Though if there really is a shortage with Rhodium, then i guess Palladium will be preferred even if it cost more since less Rhodium is needed.

 

As vehicle emission standards got tougher, i think you will find the industry was forced to use Rhodium to meet the standards....

Of the three precious metals (rhodium, platinum and palladium) currently used in vehicle catalytic converters, rhodium has by far the highest activity for the removal of nitrogen oxides (NOx) from the exhaust. It also has very high activity for the oxidation of hydrocarbons (HC) and carbon monoxide (CO) and very good resistance to the poisons present in the exhaust stream, according to Eastern Catalytic. Its primary drawback, however, is its high cost.

Source: https://www.livescience.com/36988-rhodium.html

Looks like it will continue based on the above....

 

@silverhair i wasn’t discussing Rhodium, I was talking about primary platinum vs palladium along side Rhodium. I know Rhodium is here to stay.

 

I was looking the palladium supply and demand chart, the way it is heading, we might have a SHTF scenario - for car manufacturers. Unless Russia suddenly creates supply or there’s an economic reset, there might be supply shock, meaning the price might go parabolic. If this hits car production and jobs, governments will step in and legislate.

 

If you don’t mind my asking, what % under spot did dealer take? I’ve read there’s a big spread between bid and ask for Rh.

 

This isn’t too shabby and the premium is quite low I think.
I guess dragons sell well and platinum won’t sell itself.
In that case, why not make a die of hot chicks next time?

 

The dragon is really cool. We don’t have this coin here in Singapore. The premium for other platinum coins is ridiculous, upwards of 7.5%. I’m getting those 1oz Valcambi but even those the premium is 6%. The premium for 100g bars is a little lower at 4.5% only.

 

I thought so too. One of the nicer dragon designs, a bit more edgy than usual for Perth mint. I saw it on Apmex today and began to covet it. Do you have GST in Singapore? This tax is painful in Australia...10% But if you buy investment grade metal overseas there is no GST.

Given the unpopularity of platinum at the moment, coupled with the design, this item is tempting.

 

The 7% GST was removed for investment grade 999 gold, silver and platinum bullion in 2012. For coins, they publish a list of "approved coins" that are GST exempt. Common running series such as Britannia, Lunars, Kooks, Maples, Kangaroo, QB, Koalas, Crocodiles, Philiharmonic, Libertads and ASE are exempted. For platinum, Platypus is also GST exempt but not this dragon (not referring to the Lunar dragon). The gold dragon+phoenix, double dragons are not exempt, otherwise I would have bought the gold coins.

I first looked at pt in Oct 2018, bought a couple of QB coins in the following months. I was paying like $900 or a bit lower for QB coins (actual price incl. premium). It was more of for collection thing than investment as I was focused on gold and silver. To me, the proposition for pt isn't as strong as ag and au as it isn't a real monetary metal.

I think pt poses a much higher short to medium term risk than gold or silver.

1. Liquidity risk - it maybe difficult to sell off a reasonable amount of pt metals when the time comes, and even if it's possible to find a local dealer, the discount will be large, such as 10% below spot.
2. High silver like premiums.
3. Risk of price plunging due to oversupply or recession, like what Alor said, down to $600.

However, long term, 10-15 years, I'm quite sure the price of pt will be much higher than gold due to fuel cell application.

 

I wonder if platinum is at a low. It is hard to sell and yet it is rare.

I think that is the key issue, just as it was with Rhodium. At the time, nobody here was interested. Yet it gained 10x in AUD retail terms last week.

So, sentiment is not helpful until sell time.

Scarcity on the other hand is important. This is why now I am wondering about platinum. Rhodium, gold and palladium are rare and up, but not Pt

Platinum also relies on South Africa and Russia. These aren’t likely to be stable areas in the times of conflict.

I think it is not really even valued as a monetary metal at the moment.

It might be higher risk short term. I don’t know.

Longer term however, it has several key qualities that suggest a rise in price.

 

if the price collapses in the near term, then this may be a windfall opportunity

 

Platinum is low because the supply is greater than demand and physical stock is rising every year. The following is taken from this report - https://platinuminvestment.com/files/128443/WPIC_Platinum_Quarterly_Q1_2019.pdf

I've not read the whole report yet. In comparison, Palladium is in shortage.

 

Gold has performed reasonably well as a long term investment however I doubt anyone 12 years ago could have imagined just how well Palladium would perform and how poor Silver and Platinum as an investment would become.
Below are a few screenshots from a May 2008 ABC price list which shows the performance of precious metals over the last 12 years.
Gold has performed reasonably well!
Silver has performed poorly!
Stacking Platinum has been a disaster !
Palladium has hit the ball out of the park!

IMG_20200112_190214 by Aurora et luna posted Jan 12, 2020 at 7:03 PM

IMG_20200112_190057 by Aurora et luna posted Jan 12, 2020 at 7:03 PM

IMG_20200112_101756 by Aurora et luna posted Jan 12, 2020 at 6:59 PM

 

Palladium and platinum are industrial metals so the performance will depend very much on supply and demand. The same with uranium. The green movement has ensured that the use of diesel (which uses platinum for autocatalyst) will continue to decline even while the demand for petrol vehicles (which uses palladium) increase. How the metals perform the next 12 years will depend very much on industrial demand in the future.

In other words, platinum is a bet that fuel cell will take off in the future. So the past prices don’t matter. If fuel cell takes off, we’ll be looking at $10k platinum at the minimum. But it may take more than 12 years for this to happen.

If fuel cell don’t happen or takes too long to happen, we can refer to the past price performance of platinum which is between $600 to $2k per oz.

 

I remember when clawhammer was selling a kg of Pd for about 20k here and that looked expensive at the time, judging by the lack of takers. Might have been 2013 or 2012.

Pd was well served by government decree which created industrial demand.

Pt might be a dead cat bounce up before heading down the rest of the staircase. Yet, the recent low on the long term graph does look like a low. It is rare as well and in the event of a new major global use case the supply should hold for a longer period than Rh so there should be a longer window to buy in before the demand outstrips supply.

From a dead cat perspective, if the trend is to continue down, that suggests car manufacturing will also be down. I understand Pt jewellery is not currently popular in China. In the much longer term, I think Pt’s big strong point is rarity.

Silver really needs investment demand to save the day. Looking at silverinstitute figures, the investment demand died off in the last 3 years or so. Silver bullion has been a poor to piffling performer for almost all the years since 2011. It is a sad thing to read the silver websites and see the same people strutting and spruiking the same stuff, even despite all the evidence to the contrary. Nobody is buying it, given the silverinstitute figures. It would be better for everyone if they were more critical thinkers. You’d think 10 years of being wrong would give pause for thought.

Gold as you say is overall steady.

For all of them, the better time to buy is low. The next problem is selling when in clover.

Pt looks quite low now in terms of the LT graph. Being a fairly small tonnage mined per year, there is not many belt notches before supply is tight for a period. It’s cold comfort to anyone who bought near the ATH.

 

I first saw palladium in the 90s. A souvenir shop was selling a key chain with a small piece of pendant made of palladium attached. It was just displayed like any merchandise in a department stall. Not under lock or in the glass cabinet. It's as worthless as that. At that time I didn't know much about it other than it looked like stainless steel but much heavier.

Apparently looks can be deceiving. The same as silver - it looks silly as compared to gold, tarnishes, but who knows? Buy a bit of everything, as long as it is cheap - the downside will be limited (metals don't go to zero unlike stocks), but if it turns out to be valuable, the upside is much more.

Rarity is very important in the future. Just like mintage, the smaller the better. Bitcoin is rarer than gold, hence more expensive than gold.

 

Palladium going parabolic. What does this mean? It it bursts, might bring down pt? But if it goes all the way up to $3000, it will drag pt up to $1400 or higher?

 

Russian Pt supply reach market in 2024
it could be SA cutting back that push the price higher
Pd is in a bull market 60+ a day

 

I think pt is just following pd cos the higher pd goes, the more likelihood of substitution. If substitution happens, even Russia's supply is insufficient. Let's not forget there is also fuel cell and fuel cell uses even more pt, 10g as compared to 2g for auto catalysts.

 

Just went above $1500 aud....