Rising Recycling not a threat for Platinum prices; Auto-related demand at risk

UNITED STATES June 16 2016 4:23 PM    

NEW YORK (Scrap Register): UBS  said that auto-related platinum demand faces some threats but is not in a  structural decline, also citing some areas in which demand might rise.  

“Is auto demand for platinum in structural decline?” the bank said. “Not  on our base case, but platinum demand from auto faces many threats from 1)  increasing adoption of electric vehicles; 2) the potential for further market  share erosion of diesel; and 3) the efforts of manufacturers to 'thrift'  platinum content. These risks could potentially be at least partially offset by  increasing demand from fuel-cell vehicles and increasing vehicle usage in  India.”

Meanwhile, the bank does not see increasing recycling as a threat  to prices, commenting that “we estimate its place on the cost curve surprisingly  high at the 50th percentile, using Umicore as a case study.”