These metals skyrocketed this year already, another 100% upside left to go?
Trevor Raymond – Head of Research for World Platinum Investment Council (WPIC) and former Head of Investor Relations at Anglo American Platinum has indicated that the price of Platinum (currently US$1,050/oz) is likely to rise closer to that of Palladium (US$2,360/oz).
Anglo American Platinum (the world’s largest Platinum producer) have announced that they actually fully processed ALL of the ore grade they had built up while their ACP plants were being re-built. This processing / refinement of ore into high grade Platinum was fully unwound (sold) into the market in 2021. This large oversupply of stock (which has now been cleared) together with the impact of the global chip shortage on car manufacturing (and therefore demand) is what caused the negative price bias in 2021.
Together with the positive news that car manufacturers’ orders are going to be rapidly back-filled with pent up demand for new cars, major substitution of Palladium in favour of Platinum (both metals being perfectly interchangeable within the catalytic converter) and ever-higher loadings of Platinum to meet stringent pollution controls, this is creating huge excitement in the Platinum market and plenty of food for thought for the upside potential of Pt.
Trevor concludes ‘Platinum is undervalued compared to Gold and hugely undervalued compared to Palladium’… and we suspect this window of opportunity (historically low comparative pricing) has the potential to close rather quickly.
NB. WPIC conservatively forecasts an additional 200,000oz of Platinum will be used in 2022 as a function of substitution out of Palladium and that will rise to +400,000oz in 2023!