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Platinum Group Metals: Issues and Opportunities

Thintri, Inc. announces the release of Platinum Group Metals: Issues and Opportunities, a new market study that surveys current market conditions in platinum group metals (PGMs), and analyzes emerging demand, supply constraints and price volatility. The report also explores opportunities generated by new techniques of PGM recovery from previously-unused resources, and opportunities created by development of new, much less costly substitutes.

The report separates hype from reality and assesses the dramatically changing landscape facing PGM users and suppliers. Forecasts are supplied for demand and prices under current conditions going out to 2022, as well as an analysis of the effects of new technologies for PGM replacement and recovery.

Background on PGMs

Sourcing and Suppliers

Applications

• Automotive and Transportation
  
• Electronics/Electrical
  
• Medical/Dental
  
• Industrial and Scientific
  
• Jewelry, Investment and Coinage

The Supply Side

• Potential Shortages and Supply Threats
  
• Response to Shortages
  
• Political Issues
  
• Long-Term Solutions

The Demand Side

• The Automotive Demand Driver
  
• The Jewelry and Investment Demand Drivers
  
• The Petroleum Demand Driver
  
• Industrial Demand Drivers
  
• Medical/Biomedical/Dental Demand Drivers
  
• Other Demand Drivers
  
• PGM Demand by element
  —Platinum
  —Palladium
  —Rhodium
  —Iridium
  —Ruthenium
  —Osmium
  —Influence of Alternative
  
• Energy Schemes
  
• Projected Price Trends

PGM Replacement

• Precious Metals and Reduced-PGM Alternatives
  
• PGM-Free and Reduced PGM Autocatalysts
  
• Alternatives Based on Conventional Chemistry
  
• Alternatives Based on Nanotechnology
  
• Electrolysis Catalyst Alternatives
  
• Impact of Alternatives on PGM Demand and Price

Scrap and Recovery

• Improved Recycling Schemes
  
• Slag and Mine Waste

Background on Platinum Group Metals: Issues and Opportunities

Platinum group metals (PGMs), namely platinum, palladium, rhodium, iridium, ruthenium and osmium, are rare, expensive and critical to today’s economy. Up to now, there have been no other materials that can duplicate their performance in fundamental applications. Those applications include autocatalysts, the critical components in the catalytic converters found in most vehicles that reduce harmful emission; catalysts used in a broad range of industrial processes, including petroleum refining; high-temperature processing of abrasive materials such as glass; disc drives and electronic components; medical and dental implants and devices; and electrochemistry. Of course, selected PGMs are also highly prized in jewelry and investment.

Prices of PGMs are high and notoriously volatile. Rhodium, for example, went from slightly over $6,000 per ounce in mid-2007, to $10,000 per ounce in mid-2008 and then crashed to a little above $1,000 before the end of that year. While this degree of fluctuation is exceptional, it’s emblematic of the behavior of critical materials in limited supply, tied to broader economic forces like auto sales.

At this time of growing markets, the limits of supply are becoming clear. Like most natural resources, PGM supplies are inherently limited. Concerns about “peak metals,” the idea that availability has peaked for limited resources and future production will be reduced and/or more costly (which has already occurred for a number of important minerals), will soon be an important influence with PGMs. Already, palladium has entered a period of supply uncertainty and political destabilization.

Tightening of supplies comes at a time of accelerating demand. Growth of auto sales and industrialization in the developing world, particularly Brazil, Russia, India and China (the BRIC countries), as well as interest in PGM jewelry and investment by newly-prosperous populations, will place significant stress on available supplies. In addition, tightening environmental restrictions worldwide are forcing the use of more PGMs per vehicle to meet emissions rules. Furthermore, building of new oil refineries and industrial growth in a recovering economy will put further stress on supplies. Other demand drivers like medicine and petroleum, which are functions of aging populations and global economic shifts, will place stress on PGM supplies as well.

Analyses indicate that presently-known platinum reserves are sufficient for another 360 years at present rates of production and consumption. However, that estimate drops to 15 years if growing demand, particularly from growing industrialization and automobile sales in the developing world, is taken into account.

With demand growth, inelasticity of supply will likely force up prices in this decade dramatically

The response to scarcity will no doubt include reduction in PGM consumption through “thrifting,” i.e, the devising of ways to use less PGMs in established applications (which has been underway for decades). Also, rising prices will mean that deposits with lower PGM content such as those in Australia, which had been too costly to exploit in the past, will now be profitably mined, to some degree mitigating that price increase.

Another consequence will be the development of high performance, low cost alternatives, and in improved recycling and recovery.

Alternatives are sometimes as simple as substituting a less expensive PGM, such as palladium, for a more expensive one, such as platinum, although, as seen in 2017, this can force the price of palladium past that of platinum. The more significant alternatives use nanotechnology with inexpensive materials such as nickel, to fine tune the properties of nanoparticles by controlling parameters such as diameter. Inexpensive nanomaterials can substitute for PGMs in some of the most important markets, such as catalysts in the automotive and industrial markets. PGM usage in some applications, such as jewelry and electronics, is relatively immune from substitution, but most applications are vulnerable.

Recycling will become more important as PGM prices rise. Newly available technologies are able to dramatically improve the amount of PGMs that can be captured from recycled products such as catalytic converters.

Other recently developed processes are able to extract significant quantities of PGMs from mine waste that contains much higher PGM concentrations than the best quality ores. Mountains of slag and mine waste in North America and worldwide contain enough PGMs to significantly impact the supply/demand/price picture for PGMs once exploited.

Alternatives that can capture markets directly from PGMs, and new technologies that can dramatically improve PGM recovery from recycled materials and mine waste, are already commercially available or very near commercialization and will exert a growing influence on markets now owned by PGMs and PGM prices and availability.

The confluence of growing demand, limited and/or dwindling supplies, and growing availability of alternatives and new supplies will likely create a period of extraordinary volatility before things stabilize. Most of the time during the forecast period will witness the transition of established PGM markets as prices rise and users adjust to new conditions, while others take advantage of the new opportunities presented.

Understand the Markets

Platinum group metals are at an extraordinary intersection of market forces. Their rarity and expense has largely confined them to a limited set of markets. Those markets, in turn, are largely dependent on PGMs simply because there have been no viable, and cheaper, alternatives. The inelasticity of supply has led to occasionally extreme volatility in the past. Today, growing demand, fueled by a range of factors that include accelerating motor vehicle sales around the world, a rising industrial sector in the developing world and a growing consumer preference for white metals in jewelry, while supplies are relatively fixed and in some cases declining, threatens to put PGMs in an even more volatile situation. As demand exceeds available supplies, prices can be expected to rise significantly.

The Thintri market study, Platinum Group Metals: Issues and Opportunities, relies on in-depth interviews with industry executives, market development managers and government and academic researchers. The report provides a survey of the current state of the PGM markets, an assessment of viable alternatives and recovery schemes, and discussion of the effects of growing demand on availability and prices, and the effects on those prices of PGM replacement technologies and improved recovery methods.

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Report Table of Contents:

EXECUTIVE SUMMARY: PLATINUM GROUP METALS 1
E.1 Introduction 1

E.2 Applications 1

E.3 Supply, Demand and Price Issues 2
        Figure E-1 Source Countries of PGMs 3
        Figure E-2 Platinum Demand Forecast, Autocatalysts 4
        Figure E-3 Palladium Price Forecast 5

E.4 PGM Replacement and Improved Recovery Methods 5
        Figure E-4 Total Rhodium Displaced by Alternatives 6
        Figure E-5 Resulting Rhodium Price, After Alternatives 7

PART 1 HISTORY & BACKGROUND 8
1.1 Introduction 8
        Table 1-1 Platinum Group Metals and Characteristics 8
        Figure 1-1 Periodic Table of the Elements with PGMs Highlighted 9
        Table 1-2 PGM Prices, September, 2017 10

1.2 The Elements 11
        1.2.1 Platinum 11
        1.2.2 Palladium 13
        1.2.3 Rhodium 14
        1.2.4 Iridium 15
        1.2.5 Ruthenium 16
        1.2.6 Osmium 17

1.3 Sourcing 18
        1.3.1 Extraction 18
        1.3.2 Major Producers 19

PART 2 APPLICATIONS 21
2.1 Electronic components 21

2.2 Medical & Dental 23

2.3 Industrial and Scientific 24
        2.3.1 General Industrial 24
        2.3.2 Glass Manufacture 26
        2.3.3 Scientific 27

2.4 Automotive: Catalytic Converters, Spark Plugs and Sensors 28

2.5 Jewelry 29

2.6 Investment and Coinage 31

2.7 Catalysts 32
        2.7.1 Catalysts: Industrial 32
        2.7.2 Catalysts: Petroleum and Petrochemicals 34
        2.7.3 Catalysts: Automotive 34
        2.7.4 Catalysts: Fuel Cells 39
        Figure 2-1 PEMFC Fuel Cell Operation 40

PART 3 THE SUPPLY SIDE: PGM SUPPLIES, PEAK MATERIALS AND SCARCITY 45
3.1 Today’s PGM Sources 45
        Figure 3-1 PGM Production by Country 45
        Figure 3-2 Platinum Production by Country 45
        Figure 3-3 Palladium Production by Country 46
        Figure 3-4 Other PGM Production by Country 46

3.2 Peak Metals & Scarcity 47
        Table 3-1 Minerals That Have Already Peaked 48

3.3 Response to Shortages 49

3.4 Lessons from the 1970s Cobalt Crisis 50

3.5 Political Issues 51

3.6 Today’s Price/Supply Threats 52

3.7 The Case of Palladium 54

PART 4. THE DEMAND SIDE: MARKET GROWTH AND PRICE TRENDS 59
4.1 Introduction 59

4.2 The Automotive Demand Driver 59
        4.2.1 The Automotive Market Today 59
        4.2.2 Electric Vehicles and Their Impact 63
        4.2.3 Outlook for the Future 64
        Figure 4-1 Platinum Demand by Region, Autocatalysts, 2018 65
        Figure 4-2 Palladium Demand by Region, Autocatalysts 2018 65
        Figure 4-3 Platinum Demand Forecast, Autocatalysts 66
        Figure 4-4 Platinum Demand Forecast by Region, Autocatalysts 66
        Figure 4-5 Palladium Demand Forecast – Autocatalysts 67
        Figure 4-6 Palladium Demand Forecast by Region, Autocatalysts 67
        Figure 4-7 Rhodium Demand Forecast, Autocatalysts 68

4.3 The Jewelry and Investment Demand Drivers 68
        Figure 4-8 Platinum Demand by Region, Investment and Jewelry, 2018 70
        Figure 4-9 Palladium Demand by Region, Investment and Jewelry, 2018 70
        Figure 4-10 Platinum Demand Forecast – Investment and Jewelry 71
        Figure 4-11 Palladium Demand Forecast – Investment and Jewelry 71

4.4 The Petroleum Demand Driver 71
        Figure 4-12 Platinum Demand by Region, Petroleum 2018 72
        Figure 4-13 Platinum Demand Forecast, Petroleum 72

4.5 Industrial: Chemical, Electrical, Electrochemical and Glass Demand Drivers 73
        Figure 4-14 Platinum Demand by Region, Chemical and Glass 2018 73
        Figure 4-15 Palladium Demand by Region, Chemical 2018 73
        Figure 4-16 Platinum Demand Forecast, Chemical and Glass 74
        Figure 4-17 Palladium Demand Forecast – Chemical 74
        Figure 4-18 Rhodium Demand Forecast – Chemical and Glass 75
        Figure 4-19 Platinum Demand Forecast, Electrical 75
        Figure 4-20 Palladium Demand Forecast – Electrical 76
        Figure 4-21 Rhodium Demand Forecast - Electrical 76
        Figure 4-22 Iridium Demand Forecast, Chemical, Electrical and Electrochemical 77
        Figure 4-23 Ruthenium Demand Forecast, Chemical, Electrical and Electrochemical 77

4.6 Medical, Biomedical and Dental Demand Drivers 77
        Figure 4-24 Platinum Demand by Region, Biomedical 2018 78
        Figure 4-25 Platinum Demand Forecast – Biomedical 78
        Figure 4-26 Palladium Demand by Region, Dental 2018 79
        Figure 4-27 Palladium Demand Forecast, Dental 79

4.7 Other Market Drivers 79
        Figure 4-28 Platinum Demand by Region, Other Applications 2018 80
        Figure 4-29 Palladium Demand by Region, Other Applications 2018 80
        Figure 4-30 Platinum Demand Forecast, Other Applications 81
        Figure 4-31 Palladium Demand Forecast, Other Applications 81
        Figure 4-32 Rhodium Demand Forecast, Other Applications 82
        Figure 4-33 Iridium Demand Forecast, Other Applications 82
        Figure 4-34 Ruthenium Demand Forecast, Other Applications 83

4.8 PGM Demand by Element 83
        4.8.1 Platinum 83
        Figure 4-35 Platinum Demand by Application, 2018 84
        Figure 4-36 Platinum Demand by Region, 2018 84
        Figure 4-37 Global Platinum Demand Forecast 85
        Figure 4-38 Global Platinum Demand Forecast by Region 86
        4.8.2 Palladium 86
        Figure 4-39 Palladium Demand by Application, 2018 87
        Figure 4-40 Palladium Demand by Region, 2018 87
        Figure 4-41 Global Palladium Demand Forecast 88
        Figure 4-42 Global Palladium Demand Forecast by Region 88
        4.8.3 Rhodium 88
        Figure 4-43 Rhodium Demand by Application, 2018 90
        Figure 4-44 Rhodium Demand Forecast 90
        4.8.4 Iridium, Ruthenium and Osmium 90
        Figure 4-45 Iridium Demand by Application, 2018 91
        Figure 4-46 Iridium Demand Forecast 91
        Figure 4-47 Ruthenium Demand by Application, 2018 92
        Figure 4-48 Ruthenium Demand Forecast 92
        Figure 4-49 Osmium Demand by Application, 2018 93
        Figure 4-50 Osmium Demand Forecast 93

4.9 Effects of Alternative Energy Schemes and the Hydrogen Economy 93
        Figure 4-51 Production of Hydrogen, Shares by Method 95

PART 5. PRICE TRENDS 97
5.1 Introduction and Methodology 97

5.2 Influences on Near-Term PGM Price 97

5.3 Trends Up To Today 98

5.4 Platinum 99

5.5 Palladium 102

5.6 Rhodium 104
        Figure 5-1 Recent Rhodium Price History 106

5.7 The Investment Picture 108

5.8 Projected Price Trends 108
        Figure 5-2 Price Trends, Platinum 109
        Figure 5-3 Price Trends, Palladium 109
        Figure 5-4 Price Trends, Rhodium 110
        Figure 5-5 Price Trends, Iridium 110
        Figure 5-6 Price Trends, Ruthenium 111
        Figure 5-7 Price Trends, Osmium 111

PART 6. PGM REPLACEMENT 112
6.1 Introduction 112

6.2 Precious Metals as Alternatives and Reduced PGM-Schemes 113
        6.2.1 Precious Metal-Based Substitutes in Autocatalysts 114
        6.2.2 Jewelry 116

6.3 PGM-Free and Reduced PGM Autocatalysts 117
        6.3.1 Alternatives Based on Conventional Chemistry 118
        6.3.2 Alternatives Based on Nanotechnology 119

6.4 Electrolysis and Fuel Cell Catalyst Alternatives 122
        6.4.1 Research Progress 123
        6.4.2 Nanotechnology: Catalysts Based on Nanoparticles and Nanotubes 127

6.5 Impact of Alternatives on PGM Demand and Price 131
        6.5.1 Effects of Platinum Alternatives 132
        Figure 6-1 Platinum Demand, Conventional Forecast 133
        Figure 6-2 Platinum Demand Not Susceptible to Replacement 133
        Figure 6-3 Autocatalysts: Platinum Displaced by Alternatives 134
        Figure 6-4 Chemical: Platinum Displaced by Alternatives 134
        Figure 6-5 Petroleum: Platinum Displaced by Alternatives 135
        Figure 6-6 Total Platinum Displaced by Alternatives 135
        Figure 6-7 Resulting Platinum Demand After Alternatives 136
        Figure 6-8 Resulting Platinum Price, After Alternatives 136
        Figure 6-9 Demand for Platinum Alternatives 137
        6.5.2 Effects of Palladium Alternatives 137
        Figure 6-10 Palladium Demand, Conventional Forecast 137
        Figure 6-11 Palladium Demand Not Susceptible to Replacement 138
        Figure 6-12 Autocatalysts: Palladium Displaced by Alternatives 138
        Figure 6-13 Chemical: Palladium Displaced by Alternatives 139
        Figure 6-14 Total Palladium Displaced by Alternatives 139
        Figure 6-15 Resulting Palladium Demand After Alternatives 140
        Figure 6-16 Resulting Palladium Price, After Alternatives 140
        Figure 6-17 Demand for Palladium Alternatives 141
        6.5.3 Effects of Rhodium Alternatives 141
        Figure 6-18 Rhodium Demand, Conventional Forecast 141
        Figure 6-19 Rhodium Demand Not Susceptible to Replacement 142
        Figure 6-20 Autocatalysts: Rhodium Displaced by Alternatives 142
        Figure 6-21 Chemical: Rhodium Displaced by Alternatives 143
        Figure 6-22 Total Rhodium Displaced by Alternatives 143
        Figure 6-23 Resulting Rhodium Demand After Alternatives 144
        Figure 6-24 Resulting Rhodium Price, After Alternatives 144
        Figure 6-25 Demand for Rhodium Alternatives 145
        6.5.4 Effects of Alternatives in Hydrogen Fuel Cell Catalysis 145
        Figure 6-26 Effect of Alternatives on PGM Demand in Hydrogen Fuel Cells 146

PART 7. OPPORTUNITIES IN RECYCLING AND RECOVERY 147
7.1 Introduction 147

7.2 Scrap & Recycling 147
        Table 7-1 Energy Savings from Processing Scrap Compared with Ore 148
        7.2.1 Electronics and Electrochemistry Scrap 152
        7.2.2 Automotive Scrap 153
        7.2.3 Market Opportunities in PGM Recycling 155
        Figure 7-1 Realized Scrap Volume: Platinum, Autocatalysts & Jewelry 155
        Figure 7-2 Realized Scrap Volume: Platinum, Other Applications 155
        Figure 7-3 Unrealized Scrap Volume: Platinum, Autocatalysts & Jewelry 156
        Figure 7-4 Unrealized Scrap Volume, Platinum, Other Applications 156
        Figure 7-5 Realized Scrap Volume: Palladium, Autocatalysts, Electrical & Jewelry 157
        Figure 7-6 Realized Scrap Volume: Palladium, Chemical, Dental & Other 157
        Figure 7-7 Unrealized Scrap Volume: Palladium, Autocatalysts, Electrical & Jewelry 158
        Figure 7-8 Unrealized Scrap Volume: Palladium, Chemical, Dental & Other 158
        Figure 7-9 Realized Scrap Volume: Rhodium, Autocatalysts & Chemical 159
        Figure 7-10 Realized Scrap Volume: Rhodium, Electrical, Glass & Other 159
        Figure 7-11 Unrealized Scrap Volume: Rhodium, Autocatalysts & Chemical 160
        Figure 7-12 Unrealized Scrap Volume: Rhodium, Electrical, Glass & Other 160
        Figure 7-13 Realized Scrap Volume: Iridium 161
        Figure 7-14 Unrealized Scrap Volume: Iridium 161
        Figure 7-15 Realized Scrap Volume, Ruthenium 162
        Figure 7-16 Unrealized Scrap Volume, Ruthenium 162

7.3 Slag and Mine Waste 162
        Figure 7-17 PGM Slag Recovery, North America 163
        Figure 7-18 Slag Recovery, North America, by Metal 164
        Figure 7-19 PGM Slag Recovery, Rest of World 164
        Figure 7-20 Slag Recovery, Rest of World, by Metal 165
        Figure 7-21 New PGM Supply with Improved Recovery: Platinum, Palladium, Rhodium 165
        Figure 7-22 New PGM Supply with Improved Recovery: Iridium, Ruthenium, Osmium 166

7.4 Effect of Improved Recycling and Slag Recovery on PGM Prices 166
        Figure 7-23 Conventional Price Forecast: Platinum, Palladium, Rhodium 167
        Figure 7-24 Conventional Price Forecast: Iridium, Ruthenium, Osmium 167
        Figure 7-25 Prices, with Improved Recovery: Platinum, Palladium, Rhodium 168
        Figure 7-26 Prices with Improved Recovery: Iridium, Ruthenium, Osmium 168

7.5 Long-Term Supply Solutions: Near-Earth Asteroid Mining 168

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#PGM2 Platinum Group Metals: Issues and Opportunities

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