Davis Recycling Incorporated
Catalytic Converters : Platinum Facts
Platinum Pricing and Information
Platinum is the rarest of the precious metals.
More than 90% of all platinum supplies come from South Africa and Russia. Virtually all of the platinum mined in South Africa is committed to industrial contracts.
In contrast with gold and silver, there are no large above-ground platinum stockpiles to protect against significant supply disruptions.
Approximately 10 tons of raw ore must be mined to produce just one pure ounce of platinum.
Today, the finest and most elegant jewelry contains platinum.
It is a Multi-Purpose Industrial Metal:
Platinum is integral to the production of about 20% of all consumer goods. Platinum's unique physical properties make many industries dependent upon its use.
Gasoline, anti-cancer drugs, fiber-optic cables, eyeglasses, fertilizers, explosives, paints and pacemakers all rely on platinum.
Japanese consumers buy approximately 85% of the world’s platinum jewelry each year.
Demand for platinum in high technology applications is soaring due to its unique properties: It is virtually uncorrodable, has a melting point in alloy of 3,215 degrees Fahrenheit, is a powerful catalyzing agent and is highly conductive.
How can I recover the Platinum out of a catalytic converter?
The process is very complicated and dangerous. The insides of a converter have only a small coating of platinum on them. The parts are dipped or sprayed and this makes removal complicated.
Platinum Market Fundamentals
Precious metals have long been recognized for their tendency to appreciate when other financial instruments, like stocks and bonds are declining. But, savvy investors are not content with just securing their assets against inflation and other economic dangers. Platinum’s unique fundamentals offer investors both the ability to hedge against uncertainty and the potential for profit.
(*As with any investment, prices can rise or fall. Consult your personal investment advisor)
Platinum’s supply/demand fundamentals are tight. In fact, were platinum mining to cease today, above ground reserves would last less than two years. In contrast, gold reserves would last nearly one quarter of a century. Platinum’s supply is tight even during periods of relatively normal mining production. Enough platinum has been supplied to world markets in recent years only after Russia has released inventory from its shrinking above-ground reserves.
Why is the demand for platinum expected to remain strong during the rest of the decade?
New clean air legislation in the United States and in many of the world’s fastest growing economies are significantly increasing the total amount of platinum used in automobiles.
Platinum is essential for the wide range of products that are being consumed in nations that are experiencing rapid gains in incomes. Because of this, world platinum use per unit of world economic output has risen rapidly in the past decade.
Platinum is used in a rapidly increasing array of products, from industrial refrigerators to spark plugs. The small amount of platinum used in each product means that the firms that manufacture them and the consumers that buy them are relatively insensitive to significant increases in the price of platinum.
Investment demand by individuals around the world is rising. Many are attracted to the vastly improving fundamentals in the platinum market. In rising markets, platinum normally develops a significant premium over gold. Platinum has historically tended to be more expensive than gold because it is considerably rarer and has more extensive and irreplaceable applications.
Emerging Markets Consuming More Platinum:
Catalytic converter platinum consumption in developing nations rose from 5,000 ounces to 205,000 ounces between 1985 and 1995 and has shown no signs of slowing.
Catalytic converter legislation is spreading quickly in Latin America. In the past five years the nation with the largest economy in the region, Brazil, and the nation with the fastest growing economy, Chile, have both passed legislation mandating catalytic converter use.
Hong Kong, Malaysia, Singapore, Taiwan and Thailand all have passed legislation enforcing domestic catalytic converter use before the end of the decade.
Auto sales in Latin America and in the emerging market economies of East Asia have grown rapidly in recent years.
It is estimated that before the end of the next decade, platinum consumption for catalytic converters in emerging-market economies will surpass the total now consumed in North America, Japan and Europe.