Why Platinum is the Most Expensive Metal

Platinum is one of the Most Expensive Metals

An increase in diesel car sales in Europe can be expected to cause a strong increase in the use of platinum in the region in 2004 and beyond. The tightening of emissions regulations in China, Europe, Japan, and other parts of the world is also expected to lead to higher average platinum loadings on catalysts, especially on light-duty diesel vehicles, as particulate matter emissions become more closely controlled.

In the United States, thrifting is continuing at most manufacturers and is likely to lead to a reduction in the use of platinum in autocatalysts. The price differential of more than $600 per troy ounce between palladium and platinum has led to the assumption that automobile manufacturers will change PGMs ratios on gasoline-engine vehicles in favor of palladium, reversing the trend of the past 3 years.

Automotive industry use of palladium is expected to increase in the short term. Average loading levels on autocatalysts are expected to increase in Europe and Japan at the expense of platinum, as more stringent particulate emission standards are introduced. Now that U.S. automobile manufacturers have sharply drawn down their palladium stocks during the past year, purchases by U.S. automobile manufacturers are likely to increase.

Many U.S. automobile manufacturers have yet to make the switch because of the history of high and volatile prices in the past. A shift towards greater use of palladium in preference to platinum on gasoline-vehicle autocatalysts by a number of manufacturers is also likely to provide a modest increase in palladium use in Asia and Europe.

In Europe, however, production of gasoline-fueled automobiles is expected to decline while sales of diesel engines continue to rise, and this will somewhat offset some of the expected growth from switching to palladium. As mentioned earlier, some U.S. manufacturers may also shift PGMs ratios more in favor of palladium, but this will be substantially offset by further thrifting.

In the electronics sector, component sales are expected to increase. Increased demand for palladium, however, will be somewhat offset by a combination of miniaturization and substitution of nickel and silver for palladium in multilayer ceramic capacitors. The sales of platinum jewelry are expected to drop worldwide as the price continues to be high and white gold and palladium are substituted.

In China, it is expected that the sale of palladium jewelry will increase as the price is lower than gold and platinum. Supplies of palladium and platinum are expected to increase significantly from new mines in South Africa.

Why Platinum Is the Most Expensive Metal 

Platinum (Pt) is one of the rarest and most valuable metals in the world, often trading at higher prices than gold. Several key factors contribute to its premium cost: 

 1. Extreme Rarity 

- Scarce Supply: Platinum is 30 times rarer than gold, with annual production of ~180 metric tons (vs. ~3,000 tons of gold). 

- Limited Mining: Over 80% comes from just two countries—South Africa (75%) and Russia (10%)—making supply vulnerable to geopolitical risks. 

 2. High Production Costs 

- Deep Mining: South African mines extract platinum from depths of up to 2 km, requiring massive energy and labor. 

- Complex Refining: Platinum ore contains 3–5 grams per ton (vs. gold’s 5–30 g/ton), requiring 10+ tons of ore for a single ounce. 

 3. Industrial & Technological Demand 

- Catalytic Converters (50% of demand): Platinum reduces emissions in diesel vehicles (though EVs threaten this market). 

- Hydrogen Economy: Used in fuel cells for clean energy applications. 

- Medical & Electronics: Essential in chemotherapy drugs, pacemakers, and hard drives. 

 4. Investment & Jewelry Appeal 

- Prestige Metal: Denser and more durable than gold, favored for luxury watches and wedding bands. 

- Hedge Asset: Investors buy platinum bars/coins as a store of value, though less liquid than gold. 

 5. Market Volatility 

- Price Swings: Platinum trades at ~$900–1,300/oz (vs. gold’s ~$2,300/oz), but its smaller market leads to sharper fluctuations.