PR89526

LONDON, May 17, 2021 /PRNewswire=KYODO JBN/--

Pgm demand recovered strongly from Covid disruption, with rising auto

production, stricter emissions legislation, and resilient industrial demand.

Mining and processing outages hit supplies during 2020 and early 2021, driving

pgm prices higher.

Palladium and rhodium prices surged to new all-time records in early 2021, with

both markets in significant structural deficit.

    -- Palladium and rhodium are forecast to remain in deficit in 2021, as

       global auto production recovers, and clean air legislation becomes

       more stringent.

    -- Platinum could move back into surplus, despite higher autocatalyst

       demand, as higher prices curb investment and jewellery consumption.

    -- Primary pgm supplies have been affected by processing plant outages in

       South Africa and mine flooding in Russia but should improve as the

       year progresses.

    -- Consumers are now responding to record prices, with car companies

       accelerating thrifting and substitution programmes, and glass

       companies reducing rhodium use.

The platinum market is forecast to move back into surplus in 2021, despite a

27% gain in autocatalyst demand, according to estimates published in Johnson

Matthey's latest Pgm Market Report. South African platinum supplies will

rebound by nearly 40%, as Covid disruption subsides, and backlogs from

processing outages in 2020 are treated. Higher prices are hitting investment,

with Japanese bar purchasing turning negative in early 2021, and ETF buying

subdued. Chinese retailers stocked up on platinum jewellery in the second half

of 2020, but the recovery has stalled due to a narrowing discount to gold.

The palladium and rhodium markets will remain in deficit in 2021. Both metals

recorded all-time high prices in early 2021, with palladium climbing above

$3,000 and rhodium repeatedly surging to $30,000. In response, automakers have

accelerated thrifting and substitution programmes, seeking to reduce the use of

these metals in gasoline autocatalysts. Despite this, both palladium and

rhodium will see double-digit growth in automotive demand in 2021, as vehicle

output rebounds, and major markets phase in tighter emissions regulations and

more stringent test procedures.

Rupen Raithatha, Market Research Director at Johnson Matthey, commented: "The

overall pgm content of catalyst systems is still rising, in line with

tightening emissions legislation in many regions, and the implementation of

Real Driving Emissions testing in Europe. This is supporting palladium and

rhodium demand, despite aggressive thrifting and substitution programmes at

virtually all global automakers. Meanwhile, platinum's share of the auto pgm

mix is rising, and demand for platinum in gasoline cars will climb steeply in

2021, albeit from a low base. Platinum will also benefit from the phase-in of

China VI emissions legislation. Meeting China VI limits requires a complete

overhaul of heavy duty diesel catalyst systems, and we expect pgm loadings on

Chinese diesel trucks to more than treble this year."

Mine supply of pgm is forecast to recover strongly in 2021, despite the

temporary closure of two Russian mines due to flooding. Shipments of pgm from

South Africa will be augmented by the refining of a backlog of approximately

one million ounces of pgm that accumulated during processing plant

interruptions last year. Strong prices will incentivise increased recycling of

pgm from scrapped vehicles, but platinum recoveries will be constrained by

technical difficulties in the treatment of diesel particulate filter scrap.

Alison Cowley, Principal Analyst at Johnson Matthey, said "Primary supplies

will rise by around 16% this year, although they are expected to fall short of

2019 levels. Most South African shafts are operating close to pre-Covid levels,

and production has already restarted at one of the two Russian mines that were

affected by flooding. We also expect secondary supplies to rise strongly,

although refining capacity constraints are starting to create some bottlenecks.

Many secondary pgm refineries are operating close to their capacity ceilings

and have only limited ability to take on additional volumes."

The 'minor' pgm, ruthenium and iridium, have seen steep price gains during

early 2021. This reflected robust industrial purchasing, disruptions to South

African supply, and rising investor awareness of the potential for pgm use in

hydrogen applications. Johnson Matthey's May Pgm Market Report includes a

special feature entitled 'Green hydrogen for a net zero future: What role for

pgm?'

Margery Ryan, Principal Analyst at Johnson Matthey, said: "Net-zero commitments

made by the UK, the European Union, China and most recently the Biden

administration in the USA, will require much greater use of hydrogen as an

alternative to fossil fuels, and pgm will play an important role in the

hydrogen economy. We are already seeing strong growth in demand for platinum in

hydrogen fuel cells for stationary and transport applications. In future, we

expect to see wider use of pgm catalysts to produce green hydrogen using PEM

electrolyser technology. Although it is early days for the clean hydrogen

sector, it is already starting to shift sentiment towards the pgm -

particularly platinum and iridium."

Note to editors:

Johnson Matthey Plc's Pgm Market Report can be viewed and downloaded from the

website

(http://www.platinum.matthey.com/services/market-research/pgm-market-report)

and provides an overview of demand for platinum group metals in 2020 and an

outlook for 2021. You can follow us on Twitter at @PMMJM.

Johnson Matthey's Market Research Department has undertaken fundamental

research into the Platinum Group Metals markets since the 1980s. Since 1985,

Johnson Matthey has published supply and demand data twice yearly, in the

Platinum and Interim Platinum series of reviews (1985−2013) and in the

Pgm Market Report (2014−2021). Previous reviews and reports can be

downloaded from

http://www.platinum.matthey.com/services/market-research/pgm-market-reports

Johnson Matthey is a global leader in science that enables a cleaner and

healthier world. With over 200 years of sustained commitment to innovation and

technological breakthroughs, we improve the performance, function and safety of

our customers' products. Our science has a global impact in areas such as low

emission transport, pharmaceuticals, chemical processing and making the most

efficient use of the planet's natural resources. Today more than 15,000 Johnson

Matthey professionals collaborate with our network of customers and partners to

make a real difference to the world around us. For more information, visit:

www.matthey.com

SOURCE: Johnson Matthey