Nissan threatens Platinum prices

An announcement by Nissan Motor Company resulted in a drop in the price of platinum at the end of last week.

The automotive sector is the most important usage for both platinum and palladium and the motor manufacture has developed an emission control catalyst for gasoline-fuelled vehicles that could halve the platinum group metal loadings currently in use.

According to the latest Platinum and Palladium survey from GFMS, the precious metals consultancy, 4.17 million ounces of platinum were used in the automotive sector in 2006. This equates to 54% of total industrial and jewellery demand.

However, Nissan’s announcement and the subsequent $30 decrease in the price of platinum should be set in context.

Developments in South African, where strike action is threatening the mining sector, could reduce supply and consequently inflate the price.

In 2006, South African mine production of platinum stood at 5.45 million ounces, or 71% of world demand.

Disputes with trade unions are currently affecting most of the country’s major platinum producers and in addition Lonmin, has reduced its 2007 forecast for production to between 920,000 and 940,000; previous estimates had been at over one million.

Nissan’s latest development, which is a joint venture with Renault, will be launched by April 2008.

The new the catalyst, which is as effective as existing products, uses nano-technology to prevents the metal particles from clustering up at high temperatures.