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Platinum for its catalytic properties is utilized in a wide variety of applications and for being a rare metal finds demand amongst speculators. Around 37-41% of platinum produced is used in Automotive industry to reduce harmful emissions, and 31-38% is used for Jewellery, 2-11% for investment purpose, and rest in industrial applications such as fertilizer, hard-disk, and pacemakers.
 Where is Platinum found?
80% of the world's feasible platinum-bearing deposits are in Bushveld in the northern part of South Africa and the Great Dyke deposit in Zimbabwe. Platinum is also mined in Russia and northern America as a by-product of other metals.
 Why is platinum noticing a surge?
Platinum prices have recently experienced a surge amid higher Chinese demand for hydrogen-powered fuel cell vehicle. The Chinese authorities are reducing subsidies for electric battery-powered vehicles and supporting fuel cell for its adaptability for longer-range vehicles. The Chinese are targeting 1M fuel cell vehicles by 2030, up from 5,000 that could lead to about 750,000 ounces of platinum demand. This move is believed to push China to join Japan in the race of Hydrogen fuel cells, which they think will triumph over battery cell amid superior energy density. Last year China spent about $12bn for supporting fuel cell hydrogen-powered vehicles to join Japan in the race. To further support the fuel cell technology, the nation has announced a Rmb500,000 national subsidy per vehicle if the engine drives at least 20,000km, which in turn is providing the impetus for the Chinese automotive companies to take a tap in the fuel cell market.
As per the recent press release from the World Platinum Investment Council (WPIC), the global platinum demand is likely to increase by 2% in 2019.
 Platinum supply and demand:Â
In the year 2019, according to the WPIC (World Platinum Investment Council), demonstrates a market surplus of 455Koz, which is 10% lower than the surplus in 2018. Â The demand is expected to grow on a steady pace mainly due to the betterment in the global economy in the initial months of 2019 and is mainly coming from the chemical and petroleum industry, where platinum is used for its catalytic properties.
Demand for the bars and coins is also showing an intense strength and is up 45% year-on-year amid doubling in investment activities globally. Platinum mining supply is expected to fall by 1% amid Russia production cut, which will offset the 15Koz increased production from South Africa.
Why is Palladium noticing a surge?
Palladium along with platinum is also noticing a surge in price amid Chinese demand to meet Euro 6 emission standards, as palladium is used to filter out harmful emissions. Currently, palladium is more expensive than gold in the bullion market over the supply concerns. The environmental concern is pushing the vehicle manufacturers to shift from diesel to hybrid vehicle, which use more palladium in the manufacturing of catalytic converters.
The recent fall in dollar index has a positive impact on the palladium prices, dollar index fell from its two-week high of 97.230, which in turn is also pushing the prices of palladium up because of its price appreciation nature in the event of falling dollar prices. The market participants along with gold are keeping their bet on palladium prices as well. The supply constrain in palladium is another factor which is supporting the prices.Â
Palladium Supply Concerns:
Due to its status as a by-product to platinum or nickel, the output tends to lag as compared to any other metal. The palladium market has seen a supply fall for six years as per the NYMEX data. The overall supply constraints and the Chinese demand is supporting its prices.
Platinum Spot price (XPT/USD) is hovering around USD 856.60 (As at 5:30 PM AEST, 26 February 2019) and Palladium Spot price (XPD/USD) is hovering around USD 1534.
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