palladium to platinum

palladium to platinum: LONDON, May 16 (Reuters) – Automakers are accelerating efforts to use less palladium and more platinum due to worries over palladium supply from Russia, the World Platinum Investment Council (WPIC) said on Monday, predicting a large surplus in the platinum market this year.

Automakers were already shifting to platinum, which is cheaper than palladium, to save money, but a faster transition would increase platinum demand and could lift prices while having the opposite effect on palladium. 

Russia accounts for around 25-30% of the world’s supply of palladium and around 8-10% of its platinum.

There is no sign that Russian exports have been curtailed by sanctions on the country since it sent troops into Ukraine in February but with the war dragging on, more companies may boycott Russian metal, and governments could impose restrictions.

“The substitution effort has gone up hugely,” said Trevor Raymond, the WPIC’s head of research. “The amount of savings an automaker can make are massive. What’s been added on top of that is concerns about availability (or palladium).”

At around $950 an ounce, platinum costs around half as much as palladium. Automakers use around 2.5-3 million ounces of platinum each year and around 8.5 million ounces of palladium.

In its latest quarterly report, the WPIC said the roughly 8 million ounce a year platinum market would be oversupplied by 627,000 ounces this year following a surplus of 1.13 million ounces in 2021.

In March, it forecast a surplus for 2022 of 652,000 ounces. read more

During the January-March quarter, platinum demand fell 26%year-on-year and supply fell 13%, leaving the market oversupplied by 167,000 ounces, the WPIC said.

It said that for the full year, supply would be 5% less than in 2021 and demand would be 2% greater, with auto industry demand rising 16% due to an increase in light-duty vehicle production, and higher loadings per vehicle to meet tighter emissions regulation and substitution from palladium.

Following are supply and demand numbers and comparisons.

Johnson Matthey predicts smaller platinum surplus, palladium, and rhodium deficits

At the end of 2016, a crash in commodities prices saw one class of crime become a lot less profitable. Along with oil and common metals like copper and nickel, the price of the far more expensive industrially important metals palladium and platinum slumped. In the case of platinum, the spot price plummeted by half as the world seemingly decided it did not need most of these materials. And fewer criminals were keen on jacking up cars parked out of sight and unbolting or sawing off catalytic converters that each contain around 5 grams of platinum and palladium.

According to figures obtained by London Liberal Democrats using a freedom-of-information request on Metropolitan Police records, there were just 173 thefts of the exhaust units in the city in 2017. However, by 2020, that number had surged past 14,000. It should come as no surprise that the price of both palladium and platinum also surged in the intervening years.

 

As the renewable-energy revolution kicks in, the value and price of platinum could move even higher, together with thefts. Why? Platinum-group metals often work better as chemical catalysts than other materials. Not only do palladium and platinum play a key role in breaking down nitric oxide (NO) and other pollutants in car exhausts, but these metals tend to deliver the best results across a broad range of chemical reactions. From margarine manufacturing to petrol production, you can often find platinum and other rare neighbors in the periodic table such as iridium, rhenium, and ruthenium.

Even in the clean-energy revolution, platinum-group metals feature heavily. For the reaction that generates molecular hydrogen, platinum itself is currently the basis of the leading catalysts. For the vital partner reaction that allows water splitting to take place, promoting the formation of oxygen, the two best elements are iridium and ruthenium.

How the metal gurus hunt down a change of catalyst

For such rare elements to play a pivotal role in chemical reactions that will underpin the transition to a world that has largely abandoned fossil fuels, calls into question how practical that transition can be. Being catalysts, the metals are not used up in the chemical reactions they enable, though they may be poisoned by contaminants. And they are not needed in enormous quantities. A 2015 study by Jakob Kibsgaard and Professor Ib Chorkendorff at the Technical University of Denmark found that for the hydrogen-evolution reaction used in water splitting, 30 percent of the world’s production of platinum from a single year would make enough hydrogen to sustain 1TW, about 5 percent of global power-generation capacity.

Though that may be manageable, that is just one reaction. And competition for the supplies that do exist will drive prices. Even today, recycling, which is helping to drive the catalytic-converter thefts, accounts for a quarter of the platinum and palladium supply, because mining simply cannot deliver enough of these metals. The situation is a lot worse for the oxygen-evolution reaction needed for full electrolysis. The Danish study estimated it would take 40 years to mine enough iridium to support the same 1TW production rate.

The search is on for substitute materials that can do the jobs of the platinum-group metals but which use far more abundant and readily available raw materials: metals such as iron and nickel. Geopolitics issues also play into the arithmetic. Even with its extensive natural resources, the US needs to import all of its iridium. Over a century ago, BASF rushed to find a vanadium-based replacement for the catalyst needed to make sulphuric acid because countries refused to ship platinum to Germany in World War One.

Finding cheaper substitutes is not an easy task. Catalysis is all about surfaces and how those surfaces change when molecules adsorb onto them. Getting the surface layout just right is the difference between an effective catalyst and a mesh that simply gets dirty. The surface characteristics are not only about how atoms are spaced out in the crystals but how the electron clouds warp as other atoms approach. 

You need to look no further than the iron in the hemoglobin that pervades our red blood cells to see how changes in those electron clouds make an enormous difference to chemical behavior. Like many metals, iron in its native state oxidizes readily and it takes a lot of energy to turn that rust back into shiny atomic iron. The cage of carbon-nitrogen chains that surrounds the iron atom at the center of a heme molecule tames iron’s hunger for oxygen to the point where only a slight change in conditions causes it to either attach oxygen or carbon dioxide molecules. With no oxygen present, the bonds between the iron atom and the nitrogen cage keep the electrons in their most reactive orbitals in a state that makes the atom slightly too big to fit neatly into the same plane as the rest of the molecule.

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