Car manufacturers are accelerating efforts to use less palladium and extra platinum due to concerns over the supply of palladium from Russia, the World Platinum Investment Council (WPIC) said on Monday, predicting a huge amount of money in the platinum market this year.Car manufacturers had already switched to platinum, cheaper than palladium, to save money, but rapid change could increase the demand for platinum and could increase prices while having the opposite effect on palladium. Russia holds about 25-30% of the global supply of palladium and 8-10% of its platinum.
There is no sign that Russia’s exports have been reduced due to sanctions in the country since it sent troops to Ukraine in February but as the war continues, many companies may boycott Russian weapons and governments may impose restrictions.
“Transformation efforts have increased dramatically,” said Trevor Raymond, head of research at WPIC. “The amount of money that an automaker can make is huge. Add to that the concern about the availability (of palladium).” For about $ 950 ounces, platinum costs about half the palladium. Car manufacturers spend about 2.5-3 million ounces of platinum each year and 8.5 million ounces of palladium.In its latest quarterly report, WPIC said an estimated 8 million platinum market would be overstated by 627,000 ounces this year following a surplus of 1.13 million ounces by 2021.
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