Commerzbank: will virus kill PGM demand, or will low prices trigger stockpiling?
The coronavirus outbreak could have one of two possible impacts on demand for platinum group metals: lower car output could mean less demand for PGMs in catalytic converters, or alternatively auto makers could ramp up buying of PGMs now that prices have collapsed, pointed out Commerzbank. Many auto manufacturers are suspending production in response to the outbreak. “Does no production also mean no demand for platinum and palladium? Or will car manufacturers take advantage of the low prices to build up stocks, as some market observers suspect?” asked Commerzbank analyst Daniel Briesemann rhetorically. “Certainly a platinum price that reached a low of under $600 per troy ounce and a palladium price of a good $1,500 per troy ounce – which for a time had plunged by almost half as compared with its late-February record high – could serve as an incentive to stockpile.”