PGM availability new
PGM availability
In any year, demand for a PGM can differ from the amount supplied to the market. PGM availability is distinct from supply, due to metal held in above-ground stocks. Above-ground stocks, accumulated over time from excess production, make up the difference between availability and supply and can take two forms.- Producer and market stocks
- Metal in service stocks
Producer and market stocks
Producer stocks (held by miners) and market stocks (held by fabricators, dealers, banks and depositories worldwide) are relatively liquid and readily available to the market. These have accumulated over time from excess production. Producer stocks only count as supply once they have been sold, whereas market sticks have already been counted as supply to the market.
Traditionally, surplus platinum and palladium stocks were held in ingot form in either London or Zurich. London and Zurich act as ‘clearing locations’ for the ‘over-the-counter’ (OTC) precious metals markets.
While the precise amount of such stocks is unknown, it is possible to track the flow of platinum and palladium into and out of these locations. Trade data for recent years suggests a significant drawdown in palladium stocks that coincides with a deficit period in annual palladium supply. This implies that above-ground stocks have compensated for supply shortfalls. Similar outflows of platinum in recent years partly reflect the growing demand in China, which has become the primary consumer of platinum globally.
There are fewer above-ground stocks of rhodium, ruthenium and iridium and these more likely to sit in producer vaults.
Metal in service stocks
Metal in service stocks have already been purchased for use in applications and are unavailable as supply while still required in those applications. Should requirements change, due to technology or market shifts, this metal is recoverable and could become available to the market. Substantial quantities of PGMs have accumulated in some applications, so should not be overlooked as a potential source of availability.
Metal in service stocks
These stocks are clearly not available to the market today and are retained within the closed loop. But requirements change over time, due to technological innovation, evolving consumer needs and industrial changes. This will certainly be true as the energy transition progresses.
As well as considering the evolution of mining and recycling, future PGM requirements and how they may be met should consider the metal currently in service and how this too might evolve. For example, will some of the platinum inventory currently being used in petroleum refineries to produce high-octane gasoline one day be released and find its way onto fuel cell vehicles?
