While we can’t predict when we’ll see prices of the PGMs soar again, the main point the theft of catalytic converters underscores is that these metals have real-world industrial value... regardless of the mood of precious metals speculators .
And it goes beyond that...
The Next Supercycle in PGMs Is Coming
We’re on the precipice of a car boom on the other side of the world.
As you know by now, many emerging markets – notably China and India – are in the middle of a second industrial revolution. As these countries shift from agrarian economies to modern industrial societies, billions of people will buy cars. China is the world’s largest auto market. With the dramatic increase in car sales we predicted earlier in this book for China and in India, there could be nearly 1 billion new vehicles in just those two countries in the coming decades. And with the never-ending quest to control harmful emissions and cut down on pollution, most will be equipped with catalytic converters. To meet that quota, you’d need 178 million ounces of PGMs . These PGMs are extremely rare. The world only produces about 7.3 million ounces of palladium each year. And the numbers for platinum (6.1 million ounces) and rhodium (750,000 ounces) are even smaller than that. In comparison, roughly 109 million ounces of gold and 886 million ounces of silver are mined annually. Overall, that’s only about 14 million ounces of PGMs produced annually. And remember, only about half of that goes toward catalytic converters. With that limited supply, we won’t be able to meet the growing demand for PGMs going forward. Because of that, I believe we’re in the early stages of the next supercycle in PGMs .
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