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THE VALUE OF PLATINUM
Emerging Markets
Article # : platinum162
Emerging Markets
Catalytic converter platinum consumption in developing nations is becoming an increasingly important factor for the platinum market. Much of the world runs on diesel, a fuel that works best with platinum catalysts as opposed to palladium catalysts. Countries that, two decades ago, might have had little if any environmental legislation, now have restrictions on auto pollutants in place. While there has been some loss of automotive catalytic converter market share to palladium that resulted from shifts made when palladium traded at $130, current palladium prices (now near par with platinum) have reversed this trend back toward platinum usage. Implementation of Tier II standards in North America and requirements for diesel engines in Europe will bring further growth in platinum demand.
Catalytic converter legislation is spreading quickly in Latin America. In the past five years the nation with the largest economy in the region, Brazil, and the nation with the fastest growing economy, Chile, have both passed legislation mandating catalytic converter use.
Hong Kong, Malaysia, Singapore, Taiwan and Thailand all have passed legislation enforcing domestic catalytic converter use before the end of the decade.
Auto sales in Latin America and in the emerging market economies of East Asia have grown rapidly in recent years. It is estimated that in the coming 10 years, platinum consumption for catalytic converters in emerging-market economies will surpass the total now consumed in North America, Japan and Europe.
Source: Platinum Guild