UNITED KINGDOM May 25 2016 2:43 PM
NEW YORK (Scrap Register): Auto-catalyst recycling rates will be a key swing factor in both the platinum and palladium markets, said Citi Research.
Average industry estimates are that platinum auto-catalyst scrap makes up around 17% of total supply, while palladium auto-catalyst scrap makes up 24%, the bank added.
“As secondary supply is a function of price, we believe the weakness in palladium and steel prices YTD (year-to-date) should deter smelters from scrapping vehicles to extract and reuse palladium held in catalytic converters,” Citi says.
“The net effect of this trend would be to constrict total supply, which would support a deficit market environment for palladium this year.”