by SignalFactory · February 10, 2021 | 12:11:57 UTC
Platinum rallied above $1,200 an ounce to a six-year high on bets that a recovery in industry and stricter emissions rules will tighten supply.
The price of platinum increased more than 3% on Wednesday as vehicle manufacturers across the globe focus on electric vehicle output after the Biden administration unveiled its plan to tackle climate change.
The Ford Motor Company is reportedly set to start production of its first fully electric car in Germany, while Nissan pledged to focus on building electric vehicles in the future. Meanwhile, the world’s leading EV manufacturer Tesla unveiled it is getting closer to finishing construction of its new research and development (R&D) center in Shanghai, the company’s first R&D facility outside the United States.
The white metal is used primarily in pollutant-cutting catalytic converters in cars, where it competes with palladium. The huge price disparity between the two, as well as the higher loadings demanded by tighter regulations on emissions, has raised expectations that platinum will see greater use.
“Optimism on the outlook for industrial and car demand, more stringent emission regulations and in the last couple of days some weakness in the dollar” has driven platinum higher, said Georgette Boele, a senior precious metals strategist at ABN Amro Bank NV. “Longer-term there is much more potential” for the price to rise, she said, noting the metal is cheaper than palladium and gold.
Platinum has outperformed its peers this year after spending most of 2020 lagging. The metal’s price outlook was improved significantly by disruption at a key South African refinery, which likely will drive the market into deficit this year, according to the World Platinum Investment Council. Strong investment demand from those expecting a catch-up to gold and palladium also has proved supportive.
Automotive demand is the single largest demand segment for platinum. Platinum has been used in autocatalysts for over forty years, with automotive demand the single largest demand segment for platinum, accounting for around 40% of annual platinum demand. As a result, investor sentiment towards platinum is heavily influenced by trends in the auto sector, which has had to overcome significant challenges, including the Dieselgate scandal, in recent times.
Last year, automakers were feeling the negative impact of the COVID-19 pandemic; in the first half of 2020, global light vehicle sales contracted 28% year on year, with European sales down 43%. Yet behind the headline data, and against a background of tightening emissions legislation around the world, a more detailed examination reveals several automotive themes, including resurgent diesel demand and substitution by platinum for palladium, that point to a more positive outlook for platinum automotive demand than auto sales data alone might suggest.
All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user.
This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use.
Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered.
While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all.
All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information.
All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way.
The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions.
Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company.
Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results.
Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.
