Car sector woes spell bad news for PGMs

As growing numbers of car companies idle production in response to COVID-19, we suspect that platinum group metals (PGM) demand will slow to a crawl. What’s more, job losses and income cuts due to lockdowns will curb car sales long after containment measures are lifted. Given their extensive use in auto parts, we think that palladium and platinum will be oversupplied in 2020.
Alexander Kozul-Wright Commodities Economist
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Metals Data Response

Global Steel Production (Oct.)

Global steel production contracted again in y/y terms in October, mainly owing to lower Chinese production. China’s output may rebound a little in the coming months as power rationing has come to an end, but weaker domestic demand will act as a disincentive.

23 November 2021

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Global Aluminium Production (Oct.)

October’s IAI data suggest the easing of power restrictions in China has enabled greater utilisation rates at smelters, driving the global increase in output this month. We think that aluminium output will remain high over the rest of this year, incentivised by the high price. However, we expect that the slowing of the Chinese construction sector will weigh on demand and prices in 2022.

22 November 2021

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Sky-high European steel prices on borrowed time

After soaring towards the tail end of 2020, steel prices in Europe have eased back in recent months. And we think that prices will fall much further over the next couple of years, as a combination of healthy profit margins and low inventories continue to underpin a rise in steel production across the region. In view of the wider interest, we are also sending this Metals Focus to clients of our Commodities Overview service.

18 November 2021

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Precious Metals Update

Gold jewellery demand takes a pounding

The latest trade data show sharp contractions in gold imports by major consumers China and India, suggesting that gold jewellery demand has taken a battering. Until signs emerge that the spread of COVID-19 is easing, we expect jewellery demand for gold to remain weak. However, strong safe-haven buying by investors should ensure that the price of gold rises in the near term.

9 April 2020

Precious Metals Update

Deflationary fears a bad omen for gold

Fire sales of gold have seemingly given way to safe-haven buying following yesterday’s unprecedented intervention by the Federal Reserve. Providing the Fed has injected sufficient liquidity to defend against a further collapse in equity prices, we expect the gold price to tread water. That said, the possibility of a deflationary cycle poses a major downside risk to our forecast.

24 March 2020

Precious Metals Update

Higher truck loadings no panacea for platinum

The price of platinum has risen nearly 5% since the start of February, buoyed by heightened uncertainty prompted by the outbreak of COVID-19. Later this year, and assuming the virus is successfully contained, we anticipate that a gradual turnaround in global growth will stunt platinum’s safe-haven demand and lower its price.

20 February 2020
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