• INSIGHT
PLATINUM USAGE UP AS REGULATIONS KICK IN
First published by the World Platinum Investment Council
This year , automotive demand for platinum is expected to grow by 25 % to reach almost three million ounces – 5 % above pre-pandemic levels .
Ironically , 2021 could see the highest automotive platinum demand since 2018 , notwithstanding the expectation that light-duty vehicle production will be some 1.1 million units below pre-pandemic levels and heavy-duty production will fall by 1 % when compared to 2020 .
Key to this strong demand recovery is the impact of tightening emissions legislation , especially in Europe and China , which is driving higher platinum loadings across both light and heavyduty vehicles .
The main automotive use of platinum is in emissions control systems that reduce harmful emissions from , predominantly diesel , internal combustion engine vehicles . The term ‘ loadings ’ refers to the quantity of metal used in an emissions control system . Each system on a vehicle comprises one or more autocatalyst ‘ bricks ’, sometimes in combination with exhaust gas recirculation and liquid urea injection . All parts of the system are intimately integrated with sensors and electronic engine firing controls .
As systems have become increasingly sophisticated in response to more stringent emissions limits and the advent of on-road , rather than in-laboratory , testing , metal loadings have increased . For example , in Europe , following the 2015 ‘ Dieselgate ’ scandal , the increased focus on reducing oxides of nitrogen ( NOx ) from diesel vehicles resulted in higher urea dosing rates and more platinum per catalyst to convert nitrogen oxide to nitrogen dioxide , optimising the removal of NOx .
Underpinning the 2021 forecast for automotive platinum demand is the implementation of China VI standards , applicable to heavy-duty vehicles . Johnson Matthey expects platinum group metal loadings on trucks that meet China VI requirements , which come into force from July , to be approximately three times higher than loadings for China V , with platinum accounting for most of this increase .
PGM loadings and substitution Rising PGM loadings heavily influence a further dynamic that is boosting automotive platinum demand growth . Platinum is increasingly being used as a substitute for the relatively more expensive palladium in gasoline emissions control systems due to the price differential between the two metals , bearing in mind
40 • African Mining • June 2021 that one gram of platinum provides almost the same catalytic effect as one gram of palladium .
Again , ever more stringent regulation is also playing a major part . Since January 2021 all light-duty gasoline vehicles sold in Europe and China have been required to meet new , lower emissions limits . What is more , vehicles in Europe are now subject to mandatory on-road testing as a result of the implementation of Euro 6d .
In China , under the current China 6a rules , on-road testing is not mandatory , but some manufacturers have already implemented emissions control standards that meet forthcoming China 6b rules on a voluntary basis , including on-road testing , which will be obligatory under China 6b .
The combined impact of Euro 6d and China 6 regulations has led to significantly higher palladium loadings on the gasoline vehicles produced in these regions . These higher loading requirements are exacerbating shortages in the palladium market , which in 2020 experienced its ninth consecutive deficit . This has in turn led to the price of palladium significantly overshooting the price of platinum and increasing the financial incentive to substitute , with the peak platinum to palladium discount of USD1,060 per ounce in 2019 ballooning to USD1,903 per ounce in 2020 .
As a result , platinum for palladium substitution has been accelerated further , although substitution on existing vehicle models can be a slow , less economically attractive , process . Nevertheless , some industry participants now project that , by 2025 , as much as 1.5 million ounces of additional platinum will be used annually to replace palladium in car and van models whose first release pre-dates the requirement to meet new emissions legislation , most likely in the North American market .
On new vehicle models , where new emissions systems have been necessary to meet lower emissions limits , substitution could well have taken place with almost no additional engineering , testing or certification costs . With around 32 million light-duty gasoline vehicles expected to be produced in China and Europe alone this year , already developed to meet Euro 6d and China 6a ( and in some instances China 6b ), it is possible that these regions alone will see platinum substituting over 400 koz of palladium in 2021 . • www . africanmining . co . za