Platinum Research Article

Pt the Next Great Trade 

Demand Will OutStrip Suppy 

Dr David Davis 

January 2021 

One of the most respected Platinum Group Metals (PGMs) researchers in the world Dr David Davis is a researcher for Auctus Metal Portfolios on the ground in South Africa (where circa.75% of PGMs are mined). We challenged Dr Davis to thoroughly investigate what makes investments into Platinum so appealing at this time and he has spent several months researching all of the fundamentals behind the supply and demand global picture of Platinum.

Dr Davis has generated several ground-breaking conclusions that support our price outlook for Platinum over the next few years.

We would like to share with clients the most salient points of Dr David Davis’ thesis on Platinum (which ran to over several reports, the last one over 50 pages) and in particular the definitive conclusions that he has arrived at.

The strong demand for PGMs is inextricably linked to the introduction of vehicle regulation and standards for controlling the tailpipe emission of harmful gases (US Clean Air Act of 1970). Vehicle emission standards have been progressively tightened through regulation worldwide since 1970. In response, vehicle manufacturers have had to increase the content (loading and loading ratios) of palladium, platinum and rhodium (PGMs) in autocatalysts to meet the stricter limits. The auto industry has introduced new in types of drive trains for vehicles being offered for sale. Furthermore, radical shifts in the types of vehicles being offered is becoming a moving target as governments strive to meet zero net emissions by 2050.

Dr Davis concludes that there will indeed be a substantial supply/demand imbalance in Platinum that will increase from 2021 and structural deficits all the way into 2030 as a result of many varying factors which we will summarize below. This rarefied imbalance will result in significant upward pressure on the price of Platinum. Dr Davis believes that the larger research houses, as well as Anglo-American Platinum (one of the largest producers of Platinum in the world) have significantly over-estimated Platinum production and underestimated the global increase in demand over the same period.

These particular comments are very valid and a realisation that the demand curve for platinum not only for the new hydrogen economy but the continued heavier loadings within the catalytic converters ....   “There is no scenario where hydrocarbons disappear,” the chief executive of Baker Hughes, Lorenzo Simonelli, said during his keynote speech at this year’s annual meeting in the company. Like other executives from the industry, Simonelli acknowledged and welcomed the energy transition, but he noted that a 100-percent renewable energy scenario was simply not possible.

Dr Davis asserts...

“PGM demand will continuously outstrip stagnant supply and overwhelm the balance in as little as two to three years.

These reports have been most challenging as they focus on the forward-looking supply/demand of PGMs. There are many intriguing questions that I have attempted to answer. This anticipated upward movement in the price will likely be supported by a combination of a number of market indicators characterised by strong consumer demand and tight physical availability, coupled with a continuous supply/demand market balance deficit.

The objective of this review is to provide evidence and timing to support this scenario."

Dr Davis continues…

“What then is the future of PGMs given the scenario described above? The market balance for Palladium has been in deficit for at least 9 years and Rhodium is about to follow suit. In both cases, the supply imbalance has been the main driver of sky-rocketing price. In my view, Platinum will be next to board the price rocket.”

 CLICK HERE to download the full article with a foretaste and synopsis of his much larger reports to be released by us in the weeks and months ahead.   

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Disclaimer : The information contained in this website should be used as general information only. It does not take into account the particular circumstances, investment objectives and needs for investment of any investor, or purport to be comprehensive or constitute investment advice and should not be relied upon as such. You should consult a financial adviser to help you form your own opinion of the information, and on whether the information is suitable for your individual needs and aims as an investor. You should consult appropriate professional advisers on any legal, taxation and accounting implications before making an investment.