'Don't forget palladium,' says Johnson Matthey
By: Nicole Mordant
Posted: 2003/03/10 Mon 17:58 ZE2 / © Mineweb 1997-2003
TORONTO - World-leading autocatalyst manufacturer, Johnson Matthey, is hard at work extolling the virtues of palladium to car makers in an attempt to alleviate the current demand stress on platinum. The price of platinum hurtled to 23 year highs in February, partly on demand pressure, fuelling concerns in the market that it could mimic palladium's disastrous rise-and-fall scenario that saw rampant demand wither when car makers switched to cheaper platinum.
"What we are saying to car companies is ‘don't forget palladium'," Gordon Bassett, the general manager for Johnson Matthey's precious metals marketing unit in the United States told Mineweb on the fringes of the PDAC conference in Toronto.
"We are working with car companies to encourage them to have a good mix of platinum and palladium catalysts. We are saying ‘utilise more palladium so as not to put so much strain on platinum'."
The message was bearing fruit with "some slight movement" back to palladium already evident, Bassett said.
Car manufacturers use palladium and platinum in the manufacture of autocatalysts, components that eliminate harmful gasses from exhaust fumes. Autocatalysts are required by law in vehicles on the roads of North America, Japan, Europe and parts of Asia.
Autocatalyst manufacture is by far the biggest demand sector for palladium, annually using more of the metal than all other applications put together. That said, demand from this sector plummeted by 38% last year to 3.16 million oz, the third year in a row that demand has contracted. Following palladium's surge to record levels of more than $1,000 in the late 1990s, autocatalyst manufacturers switched to less expensive platinum, sparking a collapse in the price of palladium to around $220.
Bassett said the "use palladium" message was easier to press home in the United States, where gasoline vehicles predominate, than in Europe, where fuel-efficient diesel vehicles are continuing to make deep inroads into vehicle sales. Diesels, which can only use platinum-based catalysts, as opposed to gasoline engines that can also use palladium catalysts, are expected to have made up 40% of passenger vehicle sales in Europe in 2002.
Bassett said the reasons for palladium's rampant volatility in the late 1990s were a thing of the past. Car manufacturers were no longer dependent on notoriously unreliable Russian supplies and more reliable supplies were forthcoming from South Africa as the palladium-richer UG2 reef began to be mined with greater vigour. The availability of more above-ground stocks, that is, palladium recycled from spent autocatalysts, could also provide car companies with the comfort of uninterrupted supply.
