A surge in sales of hybrid cars as electric vehicle take-up slows is set to provide an unexpected boost to demand for platinum group metals (PGMs) in the...
LONDON - A surge in sales of hybrid cars as electric vehicle take-up slows is set to provide an unexpected boost to demand for platinum group metals in the coming years, similar to the extended lifespan now predicted for coal.
"You're still facing an outright demand decline, but there's not an immediate collapse, which could have been the projection in some scenarios," said Marcus Garvey, head of commodities strategy at Macquarie Bank in Singapore. "The scope for the market to get tighter than currently projected seems very, very high if we start to see some producer response," Garvey said.
"This alone added 600,000 ounces to our automotive PGM demand estimates," it said in a report, adding that total auto PGM demand rose 8% last year to 13.1 million ounces, the second highest total ever.The biggest growth area has been in PHEVs in China, which saw sales surge by 70% in the first half. That could boost PGM demand as about 10-15% more platinum metals are needed in PHEVs than petrol vehicles because engine pollution is higher when starting a cold engine, Swarts said. Petrol engines in hybrids, especially PHEVs, are infrequently used and so often start cold.Analysts say the trend towards hybrids is expected to persist until EVs can compete on price with petrol cars worldwide, batteries offer longer driving ranges, and more charging stations are rolled out.
In China, where EVs are already similar in price to petrol cars, many consumers are opting for extended range plug-in hybrids. In such vehicles the petrol engine is solely used for charging the battery, providing longer driving distances.The shift to hybrids is expected to curb demand for key battery materials such as cobalt and nickel, since hybrid batteries are smaller than those in EVs.
Marcus Garvey Platinum Group Metals Wilma Swarts
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