Platinum Outlook: Does it Have a Future Beyond Catalytic Converter Manufacturing?

platinum outlook

If you recycle catalytic converters, you probably know that they contain three rare earth metals—platinum, palladium, and rhodium. But these three metals aren’t just for converters; they’re essential in over 20 industries worldwide.

Among them, platinum is the metal to keep your eye on as it takes center stage in the race to zero emissions—and as it helps your converter business take a prominent place in the green economy. Let’s explore how platinum's role will evolve and how it affects your converter recycling business.

Current and Future Uses of Platinum

Today, around 40% of platinum supply is used for making catalytic converters, while the rest goes into jewelry, electronics, glass, and medical applications. However, as the world shifts towards cleaner energy, platinum's role is changing.

Fuel Cells and Hydrogen Production

Platinum is a critical component in proton exchange membrane (PEM) fuel cells. PEM fuel cells convert chemical energy in hydrogen into electricity, which powers vehicles, buildings, and other equipment without burning fossil fuels and producing greenhouse gases.

Without platinum, PEM fuel cells wouldn’t have a catalyst that facilitates oxygen reduction reaction—and there would be no hydrogen economy. That’s why experts anticipate that the growing demand for PEM fuel cells will drive increased demand for platinum and create a new market for the metal.

Catalytic Converters: Short to Medium-Term Outlook

Platinum will remain vital to hybrid, plug-in hybrids, and fuel cell electric vehicles—even as ICE engines are phased out. That’s because hybrid vehicles still have converters, and the precious metal loadings are higher than in ICE vehicles. Fuel cell electric cars use platinum as a catalyst to generate electricity from hydrogen fuel.

So, at a short to medium-term outlook, platinum will remain in high demand for hybrid and fuel cell electric cars.

Also, stricter emissions regulations and environmental controls are driving the increase of platinum in the automotive industry. That’s because catalytic converters transform harmful engine emissions into less damaging gases, and they need platinum group metals (PGMs) to help them do it.

As emission controls tighten, converters will need higher PGM loadings to meet new standards, which will drive the demand for platinum skyward.

Industrial Applications

Platinum will continue to be vital to industrial sectors because it acts as a catalyst in the production of important chemicals and fuels like nitric and acetic acid, nylon, and polyurethane. These have a wide range of application in cleaning, photography, packaging, and artificial fibers.

Other critical uses of platinum include plastic production and glass manufacturing because platinum and its alloys can resist high temperatures and corrosive environments. Electronics and laboratory equipment fall into the important uses of platinum, where its stability and resistance to heat make it perfect for steel and semiconductor industries.

Medical Devices

Pacemakers, implantable defibrillators, catheters, and other critical medical devices depend on platinum. With a growing and aging population, there will be a rise in demand for advanced medical healthcare treatments and devices.

Platinum-based devices and platinum-compound drugs will continue to be vital in treating and managing chronic illnesses through implantable devices, surgical techniques, and chemotherapy.

What About Recycling? Will We Rely Increasingly on Secondary Sources for Platinum in the Future?

Platinum recycling, especially through spent catalytic converters, is a well-established industry that is poised to endure in the long run. Approximately 25% of the world’s platinum supply currently comes from recycled sources, and tighter emissions controls will only drive that percentage upward. Let’s take a deeper dive into the factors that will drive platinum recycling.

Lower Emissions and Costs

Recycling platinum reduces our carbon footprint by 98% compared to mining. That’s because mines operate heavy machinery to extract and transport platinum, burning fossil fuels and contributing to greenhouse gas emissions.

Recycling is also a cost-effective alternative to mining. Where mines pay for equipment, machinery, transport, labor, electricity, and other safety-related measures, recycling platinum is 10 times less expensive.

This is why experts anticipate a rise in demand for platinum. As world economies shift towards cleaner and cost-effective strategies to get critical minerals, recycling is positioned to emerge as the next optimal solution to generate platinum.

Mines Facing Supply Constraints

Platinum mines are old and deep, making them prone to collapse and supply constraints. Mines in South Africa, for example, are facing supply risks because of rising operating costs, floods, electricity shortages, and increasing mine depth. These factors lead to mining operations becoming unprofitable or only profitable when platinum prices get low.

Aging infrastructure and lack of investment in new platinum mining projects prevent mines from operating at full capacity or expanding their operations. This will drag platinum supply downwards.

The Platinum Recycling Industry is Here to Stay

In today's market, catalytic converters are the primary source of recycled platinum—and that's not going to change anytime soon. ICE and hybrid vehicles continue to sell, and research indicates that consumers still prefer gasoline engines.

That means catalytic converter recyclers and processors will keep extracting platinum from scrapped auto catalysts for decades. With well-established machinery and proven processes to extract the maximum amount of platinum from converters, the converter recycling industry will emerge as a significant force in returning platinum to the global economy.

What About the Other PGMs Found in Converters?

The general sentiment for palladium and rhodium is uncertainty. While platinum plays a critical role in PEM fuel cells, electrolysis production, and other green technologies, the utilization of palladium and rhodium in the hydrogen economy is still in its developmental stages.

Palladium, in particular, shows promise in the emerging hydrogen economy, but experts remain cautious because of Russian supply issues and palladium substitution for cheaper platinum. Ongoing research indicates that palladium is effective for hydrogen purification, storage, detection, and fuel cells because it can absorb large quantities of hydrogen.

Despite these advantages, palladium currently accounts for only 1% of demand in the hydrogen sector. Platinum dominates with a 67% share. That’s because platinum has superior performance, lower costs, and optimal activity, making it a preferred choice for fuel cell electric vehicles.

Rhodium’s future also hides behind uncertainty. While research suggests potential applications in hydrogen purification and hydrogen gas production, its significance to hydrogen fuel cells and technology remains undetermined.

The future of the hydrogen economy sits on platinum’s back. The future roles of palladium and rhodium for EVs, FCEVs, and the hydrogen economy are yet to unfold.

How Does This Impact Your Converter Recycling Business?

Platinum is an essential cornerstone for the future, opening doors to a clean hydrogen economy and cost-saving industrial solutions. This is where you come in. As a converter recycler, you play the most vital role in returning platinum to our economy.

That’s why your business remains critical and vital, even if ICE vehicles phase out. You’re the first step in ensuring our economy continues to have a steady stream of platinum, feeding countless industries that we rely on every day.

You don’t just have the power to recycle platinum. You have the potential to drive forward the wheels of progress towards a sustainable, greener economy, and protecting our planet for the generations of tomorrow.

Published: April 19, 2024
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