Going Platinum

Elon is huge on nickel. Yes, that, on its own, has people going nuts about investing in nickel miners. I’d like to one up that and talk about other silvery lustrous metals.

Precious Metals

Over the past couple of years, palladium prices have surged, while its cousin platinum has languished. If you’re a precious metals investor, three of the four horsemen, including silver, have been getting bought like there’s no tomorrow.

Historical palladium price
Palladium Price $/oz Last 5 Years
Historical platinum price
Platinum Price $/oz Last 5 Years

Both platinum group metals (PGMs), platinum and palladium, are used as catalysts, having industrial use in catalytic converters as an exhaust emission control device for internal combustion engine vehicles. Demand obviously follows the market for automobiles and is very much correlated to the global economy. However, the supply picture is a different story. A major contributor to the significant rise in palladium prices has been due to tight supplies. Given the slowdown in the global economy, including the drop in car sales, it’s unclear, directionally where palladium is headed.

The Case for Platinum

Platinum is an interesting case. It’s the laggard among the four precious metals, but it has a unique value proposition. A typical catalytic converter in a diesel passenger vehicle uses three to seven grams of platinum. However, a fuel cell currently needs about 30-60 grams for the same vehicle. As a self-proclaimed evangelist for a hydrogen future, I’m a big believer that there will be a proliferation of hydrogen PEM electrolyzers and fuel cells. In the near term, according to industry projections, there could be 12x growth in just installed electrolyzer capacity for green hydrogen projects in six years time.

Hydrogen electrolyzer market forecast

Platinum has been range bound the last five years, but there are serious considerations for investing in platinum in the near term, apart as a precious metals play. Of course, there will be advances in technology and substitutes will be developed, but as an investment opportunity, the time is now.

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