The year 2021 started off with many uncertainties due to the ongoing pandemic. However, one thing that was certain was that the market would be greatly affected by supply and demand. The pandemic caused many disruptions in the supply chain, which led to higher prices for many commodities. In addition, the market was also impacted by an unexpected surge in platinum from a South African mine recovery. This surge caused prices to rise even higher than they were before. So, what does this all mean for the future? Well, it is difficult to say for sure what the market will look like in 2022 and beyond. However, we can expect that news events will continue to impact supply and demand, and that prices will reflect these changes.
Platinum Market News
So far, in 2022, we have seen many platinum news outlets reporting on two major factors: An increase in automotive manufacturing, and political tension with Russia.
Increase in Automotive Manufacturing
Automotive catalytic converters play an important role in reducing emissions from vehicles. Made with platinum, these converters work by converting emissions from the engine into less harmful substances before they are released into the atmosphere. In addition to its environmental benefits, platinum also provides superior durability and performance in catalytic converters, making it an essential component in the automotive industry. As environmental regulations continue to tighten, automotive manufacturers are increasingly relying on platinum to help meet emission standards. As a result, the demand for platinum is expected to remain strong in the coming years.
Not to mention, Chinese platinum imports have been on the rise. While still unexplained, it is believed that the increase in demand comes as a strategic move to prepare the country for increased emissions standards. With China set to implement tougher emissions standards in the coming years, it makes sense that they would want to build up their stockpile of platinum.
Potential Sanctions on Russian Platnium Exports
Russia is currently the world's largest producer of palladium, a precious metal with a wide range of industrial applications. The price of palladium has been rising in recent months due to the increasing tensions between Russia and Ukraine. As Russia declared war on Ukraine, the prices surged.
What does this have to do with platinum prices?
The automotive industry relies on platinum to create catalytic converters, which help to reduce emissions from cars and trucks. Currently, palladium is used as a substitute for platinum in many converters. However, if the supply of palladium drops, the demand for platinum will increase. Russia exports a significant amount of the world's platinum supply, and it is unclear whether sanctions could eventually cause a decrease in production. If that happens, it could lead to higher prices for platinum and cause problems for the automotive industry.
Is Platinum Worth Investing In?
Many people think of investing in gold when they consider precious metals, but platinum is another option that can offer A stability and potential for growth. Based on forecasts for the coming year, 2022 is already looking more promising than 2020 and 2021, which were impacted by the global pandemic. If you're specifically wondering "are platinum coins a good investment," our answer is still yes. Coins and bullion are excellent options for someone looking to diversify their precious metal portfolio.
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