Financial traders Forex believe that changes to automotive legislation in China could be about to drive the price of Platinum up once more, climbing back over $900 per ounce.
The price of platinum has been in decline since the 2015 emissions scandal, of which Volkswagen and their diesel cars were at the heart of. Since then the demand for diesel cars has shrunk markedly, while demand for petrol, electric, and hybrids has risen.
The result is that platinum has become cheaper, but with the growing popularity of ride share services such as Uber, and local governments introducing low pollution zones in major cities, many people have been avoiding buying new cars.
Platinum is currently $838.80 per ounce (£657.41), gaining between 1-2% this week. Gains in the past month have been much stronger though, between 3-5%, and this week’s gains are believed to be tied into China’s announcement that it will halve tariffs on imported vehicles. The announcement also has the potential to benefit the already high price of palladium, which is used as a catalytic component in petrol cars.
The future for platinum isn’t bad, despite the historically lower prices currently. General Motors Global Diesel Technical Specialist Rahul Mital told the LBMA/LPPM Precious Metals Conference late on Monday that nearly 85% of light-duty passenger vehicles in 2030 will still be powered by internal combustion or diesel engines, meaning platinum usage will not significantly reduce in that time period.
Beyond that, German refiners Heraeus believe that platinum could have a second wind with the electric/hybrid cars of the future through fuel cells, but this is dependent on the progression of the technology and the precious metal of choice.