Platinum Soars to Six-year High, Outshines Palladium and Gold

Proshare

Tuesday, February 16, 2020  / 10:52AM / By Funsho Idowu, Proshare Research / Header Image Credit: iStock/Ecographics


Proshare Nigeria Pvt. Ltd.


 

Platinum prices surged past $1300/t.0z on Monday, February 15th, 2021, its highest since January 2015. The white metal which is used in catalytic converters that limit emissions from automobile engine exhaust systems has been on a sizzling run from the start of the year amid rising industrial demand and ongoing interest from investors. Enthusiasm is rife that a wider supply to demand gap could lead to higher platinum prices as the global economy rebounds.

 

Chart 1Platinum Price Movement (US$) (YTD)

Proshare Nigeria Pvt. Ltd.

Source: Bloomberg, Proshare Research

 

Investors note that the white metal's allure will play a key role in the transition to cleaner energy. Platinum is a part of the electrolysis process in the conversion of green hydrogen, and with Europe and the United States, and some other countries globally favoring net-zero emissions, the white metal's demand could skyrocket


Chart 2Palladium Price Movement (US$) (YTD)

Proshare Nigeria Pvt. Ltd.

Source: Bloomberg, Proshare Research

 

Metal followers also say that the longstanding supply issues of top metal producer, South Africa, could lend support to the upward jerk in the price of industrial metal by widening the supply deficit.


So far in 2021, the price of platinum has gone up by more than 21%, but the metal still trades at a price below metals such as gold and palladium. With the platinum market recording a deficit in 2020 amid the coronavirus pandemic, investors are optimistic that the metal, which began to rally in back in November 2020, could climb by a few more notches (see table 1 below).

 

Table 1YTD Performance of Platinum, Palladium, and Gold

Commodity

15-Feb-21

08-Feb-21

31-Dec-20

Weekly Chg

YTD Chg

Platinum

1305.33

1161.74

1072.02

12.36%

21.76%

Palladium

2390.74

2341.01

2448.81

2.12%

-2.37%

Gold

1818.86

1830.81

1898.67

-0.65%

-4.20%

Source: Bloomberg, Proshare Research

 

Global Chip Shortage

Carmakers have been hit by a global chip shortage. The demand for chips has jumped during the coronavirus pandemic as people snap up game consoles, laptops, and TVs to help get through the lockdowns. This was one of several factors that have driven demand for semiconductors, but as supply struggles to keep up with demand, the chip-reliant automobile industry has suffered a jaw punch.


According to carmakers, if the chips that power in-car dials and automatic braking systems are delayed, so also will be the rest of the vehicle. Since platinum is a metal used in catalytic converters and plays a major role in tightening emissions, the demand for the white metal could drop as car manufacturers slow and shut down production as the scarcity of the semiconductor lingers.


Proshare Nigeria Pvt. Ltd.


Related News

1.         Will Gold Prices Rally in 2021? Here are Its Ebbs and Flows

2.         Coronavirus Vaccine: Tailwind for Oil, Headwind for Gold

3.         Japaul Oil and Maritime Services Plc Changes Name to Japaul Gold and Ventures Plc

4.         FMDQ Group Unveils Winners of Its 3rd Annual GOLD Awards

5.         The 2020 Gold Rush and Africa

6.         Gold Rebound Shaky as Silver Continues to Outshine the Yellow Metal

7.         Anchoria Fixed Income Monitor: Gold Remains Attractive to Investors

8.         Gold Price Hits New Record High: Investors New Safety Destination

9.         Anchoria Fixed Income Monitor: Booming Gold Price amid Pandemic

10.      Gold Jumps Past $1,700 Level as Coronavirus Fears Spur Haven Demand


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP