Learn About Futures Insider for September 8, 2011: Platinum (Part 3)

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Key terms for platinum include:

Norilsk – a nickel and PGM mining company in Russia. One of the world’s largest platinum producers.

Nanoparticles – a suspension of “sub-micrometre-sized” platinum particles for antioxidant or nanotechnology research

Key Uses

***data courtesy USGS
Owing to its rarity in a pure form, platinum was not as widely appreciated in the past as perhaps gold was. It is said that early Spaniards panning for gold were bothered by the nuisance white nuggets that would appear – an “unripe” form of gold. As research and methods to refine platinum were developed in the eighteenth century, platinum grew to be a symbol of prestige and wealth due to its rarity.

Platinum now enjoys a high level of importance for industrial applications as well as adornments. The second half of the twentieth century saw a rise in the demand for platinum as jewelry, prized for its resistance to wear and tarnish. The appeal of platinum jewelry grew first in Japan – where it was prized for its prestige, value, and purity – and only recently penetrated Western markets.

In the late 1970s, PGM consumption became highest in applications in the automotive industry and they continue to be used extensively as an oxidation catalyst in catalytic converters and as catalysts in refining fuels.

Key Concerns

Availability: By far, the most significant area of focus for platinum is its low occurrence in the Earth’s crust. The rarity of platinum compared to other metals has spawned a number of creative attempts to illustrate just how scarce the metal may be, e.g. imagining that all the platinum mined would fit in an average swimming pool or living room.

Regional Concentration: In addition to its apparently limited supply, a huge percentage of current mining is also confined primarily to South Africa and Russia leaving the door open for the possibility that any political concerns or regional unrest could disrupt supplies. An excellent example of this possibility was illustrated by the concern over limited electricity supply to mining companies in South Africa and the likelihood that refining and production would be interrupted – an event which contributed significant volatility to the market.

Applications: New applications, as well as an increase in the existing technologies which employ platinum, could shift the supply and demand dynamics rather quickly. The continued efforts to control emissions are significant in that platinum plays an important role in catalytic converters – however, new technologies have enabled the automotive catalyst creators to substitute other PGM metals, something which may impact the overall percentage use of platinum.

Economic Conditions: Since the largest demand for platinum currently comes from the automotive sector, economic issues which may impact automobile sales may also impact platinum prices.
Recent advances have also seen platinum applied in medical treatments, including its use as a component in pacemakers and even as anti-cancer therapy.

Key Concerns

Availability: By far, the most significant area of focus for platinum is its low occurrence in the Earth’s crust. The rarity of platinum compared to other metals has spawned a number of creative attempts to illustrate just how scarce the metal may be, e.g. imagining that all the platinum mined would fit in an average swimming pool or living room.

Regional Concentration: In addition to its apparently limited supply, a huge percentage of current mining is also confined primarily to South Africa and Russia leaving the door open for the possibility that any political concerns or regional unrest could disrupt supplies. An excellent example of this possibility was illustrated by the concern over limited electricity supply to mining companies in South Africa and the likelihood that refining and production would be interrupted – an event which contributed significant volatility to the market.

Applications: New applications, as well as an increase in the existing technologies which employ platinum, could shift the supply and demand dynamics rather quickly. The continued efforts to control emissions are significant in that platinum plays an important role in catalytic converters – however, new technologies have enabled the automotive catalyst creators to substitute other PGM metals, something which may impact the overall percentage use of platinum.

Economic Conditions: Since the largest demand for platinum currently comes from the automotive sector, economic issues which may impact automobile sales may also impact platinum prices.

Part 2 at Learn About Futures Insider for September 8, 2011: Platinum (Part 2)