HSBC looks for investors to once again favor platinum as they become reacquainted with the role of the metal in auto catalysts and once near-term worries about demand for diesel auto-mobiles abate.
NEW YORK (Bullion Street): HSBC looks for investors to once again favor platinum as they become reacquainted with the role of the metal in auto catalysts and once near-term worries about demand for diesel auto-mobiles abate.
Analysts cite a report from the International Platinum Group Metals Association, a trade organization representing mining, production and fabrication companies in the platinum business, reiterating that technology based on platinum group metals helps to meet tight emissions regulations.
The IPA said that with improved fuel injection and engines, and effective emissions controls, clean diesel cars meet current and future emissions limits, in addition to delivering high fuel efficiency.
Modern diesel cars – which require platinum loadings – consume less fuel and emit 15% less CO2 compared to their gasoline counterparts. They also help car manufacturers reach the European Union’s 2021 CO2 fleet average targets.
Platinum, palladium and rhodium are coated onto a substrate located in the exhaust system and act as catalysts. PGMs are the key to facilitating the conversion reactions and are therefore instrumental in significantly reducing emissions.
The IPA states that two primary exhaust elements created by diesel engines are particulate matter and nitrogen oxides (NOx). New diesel particulate filters can capture up to 95% of soot, while NOx, a by-product from combustion, can be controlled using Exhaust Gas Recirculation.
“We sense that as investors are reacquainted with the usefulness and need of platinum, prices will rally, despite near-term diesel auto concerns,” said analysts at HSBC. “But we do not believe this will be to the detriment of palladium, which we also expect to be strong.”