An alarming increase in catalytic converter thefts has been erupting across Canada and the US. Catalytic converters, which are part of a vehicle’s exhaust system, are being sought out because they contain precious metals, one of which being platinum.
The recent catalytic converter thefts suggest that the demand for platinum has been on the rise — so much so, that the US Mint is struggling to keep up with platinum coin investment demand. In the meantime, several disruptions at a South African refinery have also added further pressure on platinum supply, while tightening emission regulations have increased expectations that the precious metal will be of greater use. As a result, the price of platinum has been sent soaring in recent weeks, to the highest level in over six years.
Platinum has been performing significantly better relative to its precious metal peers since the beginning of 2021, after spending much of the prior year lagging behind. According to autocatalyst maker Johnson Matthey, platinum’s share of demand will likely see some gains, following a 15-year decline. The increase is expected to come from a higher demand for heavy-duty Chinese vehicles, which will also simultaneously boost appeal for all platinum-group metals.
Likewise, Impala Platinum Holdings spokesperson Johan Theron projects a similar movement for platinum. “Oil is going up and commodities in general are going up,” he said. “On a relative basis platinum is low on a historical level. So it’s definitely receiving a lot of investor attention and not necessarily that anything fundamentally has changed in the short-term outlook.”
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
