Platinum prices dropped 3.6% yesterday to a 6 ½ year low as the U.S. dollar strengthened and investors worry the Chinese economy is stalling. China’s factory activity contracted at its fastest rate for 6 years.
The scandal engulfing Volkswagon is not helping the sector as investors worry consumers may change their preference away from diesel engines. Platinum is a key component in catalytic convertors and accounts for 50% of the globes total platinum demand.
If regulators uncover widespread irregularities and environmentally conscious motorists switch to petrol it could totally decimate the industry. In the last 12 months the platinum price has fallen 40%.