Demand Forecast for Platinum Group Metals Revised Following Recent Natural Disasters In Japan

Posted in Industry News on 25th March 2011

The demand forecast for Platinum Group Metals (PGMs) has been revised following the recent natural disasters in Japan.

PGMs such as platinum and palladium are used in automotive catalysts and, following the recent events, car production in Japan could be 5% lower than previously expected.

Japan had been expected to produce around 9 million light vehicles in 2011 - the world's third largest producer - which would have required around 15,000oz of palladium and 7,000oz of platinum each week.

The predicted demand in the electronics market, where PGMs are used in plating, hard discs and passive components, has also been forecast to drop by 5%. Overall, demand has been predicted to reduce by 84,000oz for Palladium and 54,000oz for Platinum.

The picture is a mixed one for copper and nickel alloy suppliers. Japan consumed around 4.8% of the world's refined copper in 2010, and whilst demand for these base metals and alloys will drop in the short term, these materials will be required in the rebuilding stages, with copper and nickel particularly in demand in the forms of copper tubing, copper cables and nickel-alloy stainless steel.

Nuclear power accounts for almost 33% of Japan's electricity generating capacity and 12% of the country's overall energy consumption. Following recent events, it is expected to move away from this nuclear reliance and towards alternative energy sources. The stainless steel and titanium markets will benefit from this trend as they are used in offshore oil and gas platforms, power plants and tankers for the transportation of Liquid Natural Gas (LNG). The net decline in demand for PGMs could also be offset, particularly for platinum, as domestic fuel-cell generating units and gasoline-electric cars, both of which use PGM components, become increasingly commonplace.

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