Platinum price gets $6 billion shot in the arm

On Thursday, platinum futures dipped below $800 an ounce as the metal slides back to near 15-year lows first reached in August.

Investors have lost interest in platinum with ETF holdings dropping to five year lows. Other indicators are also bearish – the last time platinum traded at this deep discount to sister metal palladium was in 2001. In 2008, platinum was at a $1,750 premium to palladium. As for the relationship with gold, platinum was still trading near par in February this year.

But this week brought some good news on the long term outlook for the metal.

Platinum's primary use is in catalytic converters to scrub emissions, particularly in diesel vehicles. Tighter regulations implemented around the world following the Volkswagen cheating scandal three years ago has steadily eroded the metal’s attractiveness to investors.

Full battery electric vehicles makes platinum-based catalysts obsolete. But the alternative zero emissions vehicle technology – hydrogen fuel cells that only emit water vapour – needs platinum by the ounce.

Korean carmaker Hyundai on Tuesday announced a $6.7 billion program to raise production of fuel cells 200-fold going from 3,000 this year to 700,000 per annum by 2030.

Toyota was the first to back the technology for passenger vehicles, launching its Mirai – "future" in Japanese – back in 2015. Honda is bringing the Clarity back to its line-up and Hyundai’s Nexo SUV is launching in North America next year. Hyundai also inked a collaboration on fuel cells with Volkswagen in June.

The hydrogen society is probably further into the future than its promoters want you to believe, and detractors are plentiful. (Elon Musk was not only talking his book when he called fuel cell cars "extremely silly".)

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INDICES

Name Last Change
DOW 26112.50 0.09%
S&P 500 2889.67 0.09%
NASDAQ 7845.02 0.62%
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TSX-V 584.62 0.00%

Resource Commodities

Name Last Change
Gold 1347.52 0.59%
Silver 14.89 0.34%
Copper 2.65 2.647
Platinum 901.00 0.67%
Oil 51.93 1.12%
Natural Gas 2.39
Uranium 24.50 0.53%
Zinc 1.11 0.00%

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