Platinum: Relevance in Latin America
Platinum (Ticker AT: PLATINUM), a highly versatile precious metal, has experienced considerable price volatility, influenced by economic and geopolitical factors, as well as changes in industrial demand, especially in the automotive sector. Unlike gold, which is seen primarily as a safe haven, platinum serves a dual function: as an investment asset and as a key input in a number of industries, particularly in automotive and clean energy technologies. In recent years, its demand has been driven by the transition to more sustainable energy and low-emission technologies.
Industrial Use of Platinum and its Growing Demand in the Automotive Sector
Platinum group metals, such as platinum, palladium, rhodium, ruthenium, iridium and osmium, possess unique properties, including high corrosion resistance, catalytic efficiency and electrical conductivity. These characteristics make them indispensable for applications in industries such as automotive, electronics, medical devices and jewelry. In the automotive context, catalytic converters made from platinum and platinum-based metals are crucial for reducing pollutant emissions, especially in diesel vehicles. Increasing environmental regulation in regions such as Europe and Asia has driven their demand, as these converters meet increasingly stringent emission standards. However, the transition to electric vehicles could reduce their use in the long term, generating uncertainty in future demand.
In Latin America, this trend is also relevant, especially in countries that depend on the export of precious metals and seek to diversify their resource base. In addition, in countries such as Brazil and Mexico, where the automotive industry is key, the adoption of cleaner vehicles could open new opportunities for the use of PGMs in hybrid and low-emission technologies.
Platinum Supply and Production Factors in Latin America and the World
Platinum production is concentrated in South Africa and Russia, making it vulnerable to fluctuations in supply due to geopolitical tensions and local factors. In South Africa, labor problems and a lack of investment in mines have generated uncertainty in supply, while sanctions imposed on Russia have also reduced the availability of this metal on the world market. Latin America, while not a major platinum producer, has potential to explore the use of PGMs in industrial and clean technology sectors.
In addition, Latin American companies could benefit from the technology and investments of multinational companies in refining and manufacturing processes using PGMs, thus strengthening the regional supply chain. Chile and Peru, with their advanced mining sectors, have opportunities to diversify into PGMs, especially considering their proximity to the U.S. and Asian markets.
Platinum as an Investment in Times of Uncertainty
Although platinum is not typically viewed as a safe haven asset like gold, it has proven to be a reliable asset for asset diversification in times of economic uncertainty. Monetary policies in large economies, such as the United States, can have a significant impact on its price, as a reduction in interest rates could increase demand for precious metals. In Latin America, institutional investors are increasingly interested in PGMs as alternative assets in a context of volatile markets, considering their appreciation potential.
Clean Energy Innovation: New Opportunities for Platinum in Latin America
The transition to renewable energy offers a positive outlook for platinum, particularly in the development of fuel cells for hydrogen vehicles and in electrolysis processes to produce green hydrogen. This emerging demand could benefit Latin American countries seeking to develop sustainable technologies. Brazil and Chile, for example, have begun to explore green hydrogen and could increase their consumption of platinum for these purposes in the coming years, given their interest in leading the region in clean energy production.
Technical Analysis
Platinum (Ticker AT: PLATINUM),since last year has been moving in a sideways range between $1,093.33 and $838.34 having peak moments this year on May 20, generating a support supported twice in August and September respectively around $908 very close to the control point (POC) of $922. At the moment the asset has evolved downwards due to the fall in demand for vehicles as we have previously mentioned, it was oversold and the RSI confirmed it on the 29th so the price corrected to its trading area up to $984.65 yesterday. Currently the price is moving positive and the RSI is at 48%. Given that the delta pressure zone is bullish it would not be unusual to see it move to the 61.80% Fibonacci retracement around $1011.10. If demand for this product increases in the aforementioned sectors it is possible that the price could regain its last high of $1,093.33.
Top companies in the PGM sector
As a side note it is important to review what moves are being made by the major companies in this sector globally. Among the prominent companies in the PGM market are:
1. Glencore (Ticker AT: GLEN.UK) - Annual revenue: USD 255.98 billion. Producer of platinum, palladium and rhodium with operations in Africa.
2. BASF SE (Ticker AT: BAS.GE) - Annual revenues: USD 72.172 billion. Leader in emission control technologies.
3. Heraeus Group (Private) - Annual revenues: USD 27.7 billion. Specialist in catalysts and electronic materials.
4. Norilsk Nickel (GMKN.ME) - Annual revenues: USD 14.4 billion. Producer of nickel, copper, palladium and platinum.
5. Impala Platinum Holdings Limited (IMP:JNB) - Annual revenues: USD 9.03 billion. With operations mainly in South Africa and Zimbabwe.
6. Eastern Platinum Limited (ELR.TO) - Annual revenues: USD 8.18 billion. Platinum producer in the Bushveld Complex.
7. Northam Platinum Holdings Limited (NPH.JO) - Annual revenues: USD 6.7 billion. Operates some of PGM's largest mines.
8. Johnson Matthey (Ticker AT: JMAT.UK) - Annual revenues: US$5 billion. Innovator in emission and energy storage technologies.
9. Sibanye-Stillwater (JSE:SSW) - Annual revenues: $3.3 billion. PGM miner in South Africa and the United States.
10. African Rainbow Minerals Limited (JSE.ARI/OTC - AFBOF) - Annual revenues: US$1.04 billion. Engaged in PGM mining and processing in South Africa.
Platinum and PGMs represent a strategic opportunity for Latin America, both in terms of investment and diversification of key industries. Their growing demand in low-emission technologies and clean energy, as well as their stability in volatile markets, reinforces their importance as an asset in the region.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Industrial Use of Platinum and its Growing Demand in the Automotive Sector
Platinum group metals, such as platinum, palladium, rhodium, ruthenium, iridium and osmium, possess unique properties, including high corrosion resistance, catalytic efficiency and electrical conductivity. These characteristics make them indispensable for applications in industries such as automotive, electronics, medical devices and jewelry. In the automotive context, catalytic converters made from platinum and platinum-based metals are crucial for reducing pollutant emissions, especially in diesel vehicles. Increasing environmental regulation in regions such as Europe and Asia has driven their demand, as these converters meet increasingly stringent emission standards. However, the transition to electric vehicles could reduce their use in the long term, generating uncertainty in future demand.
In Latin America, this trend is also relevant, especially in countries that depend on the export of precious metals and seek to diversify their resource base. In addition, in countries such as Brazil and Mexico, where the automotive industry is key, the adoption of cleaner vehicles could open new opportunities for the use of PGMs in hybrid and low-emission technologies.
Platinum Supply and Production Factors in Latin America and the World
Platinum production is concentrated in South Africa and Russia, making it vulnerable to fluctuations in supply due to geopolitical tensions and local factors. In South Africa, labor problems and a lack of investment in mines have generated uncertainty in supply, while sanctions imposed on Russia have also reduced the availability of this metal on the world market. Latin America, while not a major platinum producer, has potential to explore the use of PGMs in industrial and clean technology sectors.
In addition, Latin American companies could benefit from the technology and investments of multinational companies in refining and manufacturing processes using PGMs, thus strengthening the regional supply chain. Chile and Peru, with their advanced mining sectors, have opportunities to diversify into PGMs, especially considering their proximity to the U.S. and Asian markets.
Platinum as an Investment in Times of Uncertainty
Although platinum is not typically viewed as a safe haven asset like gold, it has proven to be a reliable asset for asset diversification in times of economic uncertainty. Monetary policies in large economies, such as the United States, can have a significant impact on its price, as a reduction in interest rates could increase demand for precious metals. In Latin America, institutional investors are increasingly interested in PGMs as alternative assets in a context of volatile markets, considering their appreciation potential.
Clean Energy Innovation: New Opportunities for Platinum in Latin America
The transition to renewable energy offers a positive outlook for platinum, particularly in the development of fuel cells for hydrogen vehicles and in electrolysis processes to produce green hydrogen. This emerging demand could benefit Latin American countries seeking to develop sustainable technologies. Brazil and Chile, for example, have begun to explore green hydrogen and could increase their consumption of platinum for these purposes in the coming years, given their interest in leading the region in clean energy production.
Technical Analysis
Platinum (Ticker AT: PLATINUM),since last year has been moving in a sideways range between $1,093.33 and $838.34 having peak moments this year on May 20, generating a support supported twice in August and September respectively around $908 very close to the control point (POC) of $922. At the moment the asset has evolved downwards due to the fall in demand for vehicles as we have previously mentioned, it was oversold and the RSI confirmed it on the 29th so the price corrected to its trading area up to $984.65 yesterday. Currently the price is moving positive and the RSI is at 48%. Given that the delta pressure zone is bullish it would not be unusual to see it move to the 61.80% Fibonacci retracement around $1011.10. If demand for this product increases in the aforementioned sectors it is possible that the price could regain its last high of $1,093.33.
Top companies in the PGM sector
As a side note it is important to review what moves are being made by the major companies in this sector globally. Among the prominent companies in the PGM market are:
1. Glencore (Ticker AT: GLEN.UK) - Annual revenue: USD 255.98 billion. Producer of platinum, palladium and rhodium with operations in Africa.
2. BASF SE (Ticker AT: BAS.GE) - Annual revenues: USD 72.172 billion. Leader in emission control technologies.
3. Heraeus Group (Private) - Annual revenues: USD 27.7 billion. Specialist in catalysts and electronic materials.
4. Norilsk Nickel (GMKN.ME) - Annual revenues: USD 14.4 billion. Producer of nickel, copper, palladium and platinum.
5. Impala Platinum Holdings Limited (IMP:JNB) - Annual revenues: USD 9.03 billion. With operations mainly in South Africa and Zimbabwe.
6. Eastern Platinum Limited (ELR.TO) - Annual revenues: USD 8.18 billion. Platinum producer in the Bushveld Complex.
7. Northam Platinum Holdings Limited (NPH.JO) - Annual revenues: USD 6.7 billion. Operates some of PGM's largest mines.
8. Johnson Matthey (Ticker AT: JMAT.UK) - Annual revenues: US$5 billion. Innovator in emission and energy storage technologies.
9. Sibanye-Stillwater (JSE:SSW) - Annual revenues: $3.3 billion. PGM miner in South Africa and the United States.
10. African Rainbow Minerals Limited (JSE.ARI/OTC - AFBOF) - Annual revenues: US$1.04 billion. Engaged in PGM mining and processing in South Africa.
Platinum and PGMs represent a strategic opportunity for Latin America, both in terms of investment and diversification of key industries. Their growing demand in low-emission technologies and clean energy, as well as their stability in volatile markets, reinforces their importance as an asset in the region.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.