Trump move means more pollution not platinum price fall: analyst

[Redator]

The Trump administration’s alleged bid to get rid of greenhouse gas emissions standards might see more impact on pollution than platinum after its price has jumped almost 50% this year, industry analysts say.

The EPA plans to drop all greenhouse gas (GHG) emission standards for light, medium and heavy-duty vehicles and engines in the near future, according to a draft proposal, Reuters reported on Thursday. Platinum’s use in auto’s pollution-filtering catalytic converters represents about 30% of global demand, and palladium represents about 80%.

But it could be premature to conclude the EPA’s changes will remove the need for platinum group metals (PGM)-based devices in vehicles, says Ed Sterk, director of research with the World Platinum Investment Council.

“The intention is to scrap some of those controls, but it’s not necessarily to get rid of catalytic converters,” Sterk told The Northern Miner in an interview on Friday. “If you consider living in Los Angeles, which historically has had terrible problems with smog, is Los Angeles a better place with or without catalytic converters and exhaust treatment systems on the vehicles? Most people would argue it’s probably a better place now.”

Emissions standards scrutiny  

The EPA is anticipated to conclude that the Clean Air Act doesn’t authorize the agency to impose emission standards and is to lift the finding that GHG vehicle emissions put public health at risk, Reuters said. It follows the passage earlier this month of the “One Big Beautiful Bill Act”, part of which removed fines for failures to meet fuel efficiency rules since 2022.

But even with the converters themselves, Sterk noted they’re part of a complete design package of vehicles’ exhaust driven systems, and can’t just be immediately removed. Cars are going to have them for now regardless of emissions rules.

Platinum prices have gained 49% to $1,410 an oz. as of Monday, according to Trading Economics.

Analysts from Saxo Bank, Bank of America, Heraeus and others cite a rare confluence of tight supply, weak gold price psychology, strong Chinese physical demand, and diverse industrial uses as the foundation for platinum’s strong year-to-date rally. Despite skepticism over sustainability, most expect structural deficits to persist into 2025, supporting continued tightness.

Platinum demand deficit

While Sterk noted that he can’t comment on PGM price changes, demand for platinum is likely to continue exceeding supply, council  data show.

Global platinum supply has declined 12% from 8.3 million oz. in 2021 to 7.3 million oz. in 2024, while demand grew 19% in that period, from 6.9 million oz. to 8.3 million ounces. Supply this year is forecast to total 7.9 million oz. and demand about 6.9 million ounces.

Catalysts comprise the vast majority of demand for platinum and this year it’s forecast to decline by 5% to 460,000 oz. for North America.

“Even if you remove North America completely, we’d still have a supply and demand shortfall for this year,” Sterk said.

He further noted that if the EPA changes go ahead, legal challenges to the new legislation could slow the pace of its effects on the market.

Palladium surplus

Unlike platinum, palladium has a narrower range of applications and about 80% of its use is for catalytic converters, Sterk said. But with converters and greater electrification of vehicles, the trend is moving towards substituting palladium for platinum.

“Palladium is expected to go into surplus due to recycling,” he said. “We’ve got ongoing deficits in platinum for the foreseeable future, and surplus for palladium.”

Though, palladium prices have gained about 46% to $1,274 per oz. this year to date, the metal’s low prices spurred Impala Platinum (JSE: IMP; US-OTC: IMPUY), widely known as Implats, to decide to close its mine in northern Ontario next May.