by The scandal that has engulfed the VW Group had a big impact on both platinum and palladium as both metals are used in catalytic converters in vehicles. VW’s deceptive practices as regards the real level of nitrogen oxide (NOx) emissions from its diesel vehicles have highlighted the un-ecofriendly features of diesel-powered cars, which can be expected to hit demand. It is also likely to boost the chances of stricter environmental standards on NOx exhaust emissions being pushed through in Europe (the biggest consumers of diesel cars worldwide). Not to mention that, since the VW scandal erupted, the lack of rigour in anti-pollution testing has been exposed to the glaring light. In Europe, the disparity between vehicles’ declared and actual on-the-road CO2 emissions is allegedly close to 40%. The solution to the NOx emissions issue would not necessarily call for more platinum to be used, but probably would involve more costs (servicing or manufacturing) and lower-powered engines – not a very appetising prospect for car drivers. In terms of market impact, the whole affair pushed the price of platinum down (-10.2% in September) as the metal is commonly used in catalytic converters in diesel vehicles, but more marginally with petrol-driven engines. Conversely, the price of palladium, mainly used in the latter, soared (+8.6% in September).
Topics:
Perspectives Pictet considers the following as important: Macroview, Uncategorized
This could be interesting, too:
Claudio Grass writes Saving in gold is the only reliable way to save
Claudio Grass writes Is gold too expensive to buy right now?
Claudio Grass writes Is gold too expensive to buy right now?
Claudio Grass writes Sound Individualism vs Toxic Collectivism
The scandal that has engulfed the VW Group had a big impact on both platinum and palladium as both metals are used in catalytic converters in vehicles.
VW’s deceptive practices as regards the real level of nitrogen oxide (NOx) emissions from its diesel vehicles have highlighted the un-ecofriendly features of diesel-powered cars, which can be expected to hit demand. It is also likely to boost the chances of stricter environmental standards on NOx exhaust emissions being pushed through in Europe (the biggest consumers of diesel cars worldwide). Not to mention that, since the VW scandal erupted, the lack of rigour in anti-pollution testing has been exposed to the glaring light.
In Europe, the disparity between vehicles’ declared and actual on-the-road CO2 emissions is allegedly close to 40%. The solution to the NOx emissions issue would not necessarily call for more platinum to be used, but probably would involve more costs (servicing or manufacturing) and lower-powered engines – not a very appetising prospect for car drivers.
In terms of market impact, the whole affair pushed the price of platinum down (-10.2% in September) as the metal is commonly used in catalytic converters in diesel vehicles, but more marginally with petrol-driven engines. Conversely, the price of palladium, mainly used in the latter, soared (+8.6% in September).
Looking to the longer term, considering the sales outlook of diesel-powered cars has been seriously blackened, reduced industrial demand for platinum should be matched by increased demand, albeit to a lesser degree, for palladium.
Palladium, therefore, retains its status of being the most appealing of the precious metals.