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Thanks for the note from my Barron's summary this AM. People know where to find it.
"COMMODITIES. The auto market (new or used cars) is very tight. But PALLADIUM (-26% YTD) and PLATINUM (-14% YTD) are down sharply because of the drop in auto production caused by SEMI CHIPS shortages. This is unusual as most commodities are strong (S&P GSCI commodity index +28% YTD). Palladium is used more widely in the catalytic converters of gasoline-powered cars while platinum is used more in diesel-powered cars; although either metal can be used, there are large capex costs for the switch for the manufacturers. Rebound in palladium may be dramatic when the auto production picks up as chips supply-chain issues ease. On the other hand, platinum demand has fallen sharply for investments and also for other industrial application, so there is now a platinum surplus. Platinum is also much cheaper than gold (it used to be the reverse years ago)."
Before the pandemic, the US car sales were around 17+ million/yr. The post-pendemic sales rebound peaked in April 2021 at 18+ million/yr (annualized) and are now at 12+ million/yr (annualized). That gives an idea of the severe disruption caused by semi chips shortages. This despite the fact that some carmakers are continuing to produce cars sans chips/controllers and parking those incomplete cars in their own or rented parking lots.
This current problem is not related to the shift to the EVs.
Comments
"COMMODITIES. The auto market (new or used cars) is very tight. But PALLADIUM (-26% YTD) and PLATINUM (-14% YTD) are down sharply because of the drop in auto production caused by SEMI CHIPS shortages. This is unusual as most commodities are strong (S&P GSCI commodity index +28% YTD). Palladium is used more widely in the catalytic converters of gasoline-powered cars while platinum is used more in diesel-powered cars; although either metal can be used, there are large capex costs for the switch for the manufacturers. Rebound in palladium may be dramatic when the auto production picks up as chips supply-chain issues ease. On the other hand, platinum demand has fallen sharply for investments and also for other industrial application, so there is now a platinum surplus. Platinum is also much cheaper than gold (it used to be the reverse years ago)."
This current problem is not related to the shift to the EVs.
https://www.goodcarbadcar.net/usa-auto-industry-total-sales-figures/
REMX up 78% this year GMET has exposure to "green medals" used in EVs.
What vehicle are you using for platinum and palladium?
Platinum ETFs PPLT, PLTM.
FWIW, I don't have them.