After years of being written off due to the electrification of the automotive sector, platinum group metals (PGMs)—raw materials that exclusive to internal combustion engine (ICE) vehicles—may be gathering momentum for a significant comeback.In their first quarter 2025 market commentary, New York-based investment firm Goehring & Rozencwajg presents a compelling case for a new bull cycle in the sector, spotlighting the pivotal shift in both the metals’ demand and supply over the past 18 months.These trends, they argue, mirror the conditions of the late 1990s that preceded a historic bull market, when PGM miners’ values rose by factors of between 30 and 60. That run ended with the 2008 financial crisis, and the sector has since gone on a 16-year bear cycle.According to Goehring & Rozencwajg, another PGM renaissance could be on its way, and this time, the signs are pointing to a larger, potentially larger bull run.At the time of the report’s release, platinum has just surged to a two-year peak of $1,095.50 per ounce, while palladium, which for a while has been trading in parity with platinum, trails behind at $1,003.40 an ounce.ICE, hybrids to drive demandContrary to the popular narrative that electric vehicles (EV) could render PGMs obsolete, the metals are still drawing significant demand from ICE vehicle manufacturers. Goehring & Rozencwajg estimate that catalytic converters in ICE vehicles still account for roughly 65% of the PGM demand globally.The investment firm adds that demand for PGMs from the auto sector is expected to remain strong, citing data from research consultancy Thunder Said Energy, which predicts PGM demand to surge 23% by 2032, reaching nearly 23 million oz. annually.But, as Goehring & Rozencwajg’s analysis suggests, that is only a conservative case, and PGM demand has even more room to grow as the EV sector continues to underwhelm.A key driver is the rise of hybrid vehicles—particularly plug-in hybrids—which require even more PGM loading than conventional ICE vehicles due to the cooler, less efficient operating temperatures of their catalytic converter.“As hybrids gain share at the expense of both EVs and ICEs, the added PGM intensity becomes an important and underappreciated source of future demand—one that few analysts have yet chosen to highlight,” their report states.Regulatory trends are also shifting in favor of increased PGM usage. Emissions standards are tightening globally, from the EU’s upcoming EU7 standards to China’s CN7 and India’s BS7, all of which will require higher metal loadings. Catalytic converters in Europe already use 7–9 grams of PGMs, compared to 3–4 grams in developing markets, and the gap is narrowing.Due to tightening emissions standards, 98% of all new vehicles sold worldwide are equipped with catalytic converters, the report adds.Investments in PGMs, which had collapsed due to high interest rates and bearish sentiment, may also be rebounding. Platinum ETFs—for which demand has shrunk by three-quarters from its peak in 2020—have shifted from liquidations to accumulation, signaling early signs of renewed investor interest.Prolonged supply deficitIn support of Goehring & Rozencwajg’s bull case is supply-demand trends pointing to a prolonged period of market deficit. The World Platinum Investment Council estimates that the platinum markets recorded deficits of 750,000 oz. in 2023 and 680,000 oz. in 2024, with another shortfall of 500,000 oz. coming in 2025.Low production margins have led to a sizeable contraction (400,000 oz.) in South African mine output. According to the WPIC, about 40% of global PGM production is now uneconomic at current prices. Industry leaders like Impala Platinum and Anglo American Platinum are reporting severely compressed margins, and further mine closures, such as Canada’s Lac des Iles mine, loom large.New supply is limited, with only the Platreef mine in South Africa expected to add significant output—but not until 2029 or later. Meanwhile, above-ground inventories are falling fast, having declined from 5 million ounces in 2022 to an expected 3 million in 2025.Recycled supply of PGMs has also come under pressure, down some 300,000 oz. over the last year. A surge in used car prices have resulted in owners holding onto their cars longer and fewer metals recycled.Read the full report here.
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