PGM’s Market Overview: Setting The Plate For The IPMI 2019 … · 2019. 8. 3. · PGM’s Market Overview: Setting The Plate For The IPMI 2019 Auto Catalyst & Fuel Cell Seminar

PGM’s Market Overview:Setting The Plate For The IPMI 2019 Auto Catalyst & Fuel Cell Seminar

Matt WatsonPrecious Metals Commodity Management LLC

IPMI Auto Catalyst & Fuel Cell Seminar April 4, 2019 Slide 2

16-years Precious Metals Commodity Management• Purchased $100’s of millions of industrial PM products• Treading / Hedging / Financial Services• Design & Process Thrifting. Reduced media sputter IDM 60% ($1.17 to $0.46)• Supply Chain Compression: Weeks supply from 2-years to 27-weeks.• Extensive interface with Heraeus, JM, Tanaka, JX, Solar Applied Materials,

Materion, Scotia, Furuya, DuPont, 5N.• Active Member of IPMI and Silver Institute.

Matt Watson’s Bio

13-years

Industrial StatisticianITT Groups & Consulting

1984 1997

Industries:• Defense Technologies• Satellite Technologies• Semiconductor• Automotive• Solar PV

17-years

Hard Disk Drive Industry14-years with Seagate

2011

Substrates:• Engineering & Operations• NiP Plating, CMP, Wash & AOI

Media:• PM Thin Film PVD

Precious Metals• $540M in Pot and Ru• PVD Target Supply chain

Management• Trading, Leasing, hedging, PM Wet

Chemistries

2-years

Solar PVFlex CI GS

2013

Supply Chain & Operations:• Thick Film Ag Paste

Screen Print• Ruthenium PVD• Rotary PVD PM’s• Se CVD• Vapor Deposition• Multiple Plating

Chemistries

5-years

Tanaka America

2018

PM Industrial Products Bus. Dev. & R/D• N. American R&D

and Mktg.• HDD• Semiconductor• Flex. Elect.• Medical• Wet Chem.• New Energy

Precious Metals

Commodity Mgmt. LLC

Present

Consulting:• Mkt. Research• Risk Mgmt.• Trading• Hedging• Forecasting• Strategy

Development


Precious metals Commodity management

PM Market Research, Hedging Strategies,

Thrifting Strategies, Trading Support, Risk Management

Founded August 2018

Utilizing extensive experience in the Precious Metals Commodity markets to help clients make better decision, reduce costs, drive thrifting activities, improve trading performance, reduce risks, create and implement hedging strategies.


Outline Today

Auto Catalyst – Day 1

• Precious Metals 101 Crash Course – In <10 minutes

• Auto Catalyst Highlights: Previous years presentations highlights

• PGM price response since 2017 … I told you so.

• PGM Surplus/Deficits

• Additional concerns

• Current events

• Auto Catalyst PGM Demand Forecast Highlights


Organizing Existing Market Data

Data Sources

Supply Trends

Demand Trends

Metals Valuation

Fabrications & Financing

• Most Industrial Fab = 6.5% of the Metal Value

• Jewelry 9.5% Fab, Bullion/Coins Fab 1%

• Auto Catalyst Refine Fees / Other Refine Fees

• ~2% in Various Financing Instruments: Leasing, hedging expenses,


-

200

400

600

800

1,000

1,200

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

f

Mill

ion

s To

z

Global Mined Precious Metals (Toz)

Gold Silver Platinum Paladium Rhodium Ruthenium Iridium Osmium

Silver #1 Abundance

Gold #2 Abundance

All 6 PGM’s Combined – Trivial Abundance

-

10

20

30

40

50

60

70

80

90

100

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f

Mil

lio

ns

Toz

Global Precious Metals Recycle (Toz)


Silver Recycle

Gold Recycle Volume

Mined Volume Recycled Volume

Mined & Recycle Volume


(Mined + Recycle Volume) * Price Fix

-

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f

Mill

ion

s

Global Precious Metals Mined + Recycle Total Supply (M's Toz)


Silver #1 Abundance

Gold #2 Abundance

All 6 PGM’s Combined – Trivial Abundance

Gold

Gold

Silver

Platinum

Platinum

Paladium

Paladium

Rhodium Rhodium

Ruthenium Ruthenium

Iridium

Iridium

Osmium Osmium

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f

Precious Metals Basket Prices


$/Toz

Total Supply = Mined + Recycle Price


TAM – Precious Metals Total Avail. Market Revenue

$221,159

$301,957 $317,600

$256,776

$230,789

$208,425

$231,189 $229,738

$234,277 $261,131

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f

Global Precious Metals TAM/Revenue ($M's USD)

Gold Silver Platinum Paladium Rhodium Ruthenium Iridium Osmium TAM ($M's)

(Metals Mined + Recycle) * Fix+ Estimated Fab + Estimated Financing + Recycle Fees= TAM: Total Available Market

$96,965

$72,458

$64,855

$221,159

$301,957 $317,600

$256,776

$230,789

$208,425

$231,189 $229,738 $234,277

$261,131

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f

Global Precious Metals TAM By Main Category

Jewelry Bullion / Investment Industrial Total

TAM by Precious Metal TAM by Top 3 Categories

Jewelry

Bullion

Industrial

Fab Estimated: Most Industrial Fab = 6.5% of the Metal Value. Jewelry 9.5% Fab, Bullion/Coins Fab 1%. Auto Catalyst Refine Fees / Other Refine Fees. ~2% in Various Financing Instruments: Leasing, hedging expenses,


$96,965

$72,458 $64,855

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Jewelry Bullion / Investment Industrial

2018 Top 3 Precious Metals TAM Categories (M's US$)

Decomposing the ~$234B Precious Metals TAM (Total Available Market)

41%

30%29%


$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Au

to C

atal

yst

Bra

zin

g A

lloys

& S

old

er

Dia

gno

stic

s/A

PI

Bo

nd

ing

Wir

e

Co

nd

uct

ive

Inks

Ch

em

ical

PV

So

lar

Fro

nt/

Bac

k…

We

t C

hem

istr

ies

Elec

tric

al -

Oth

er

Silv

erw

are

Me

dic

al C

om

po

ne

nts

PV

D T

arge

ts

Co

nn

ecto

rs/R

ivo

t…

MEM

S Li

ds

Pe

tro

leu

m

Ph

oto

grap

hy

Den

tal

Evap

ora

tio

n M

ate

rial

s

Gla

ss

Res

ists

Wir

e/G

uaz

e

Pe

tro

leu

m

Fue

l Cel

l Cat

alys

t

All

Oth

er

Mill

ion

s

2018 Industrial Demand Pareto ($M's USD)

Au Ag Pt Pd Rh Ru Ir

Decomposing the $65B Precious Metals Industrial Products TAM

This is our focus at IPMI PGM’s In Mobility Event.

1) $14.6B Auto Catalyst and 2) Emerging $60M Fuel Cell Catalyst Markets

90+% TWC Slurry

Production

TWC Test & Design

Formulation

4 Big Industrial FC Catalyst Producers

#1 $14.6B

#2

Fuel C

ell C

ata

lyst

by 2

04

0

http://www.catalysts.basf.com/





Outline Today






• Additional concerns

• Current events



GFMS: Global LDV + HDV Forecast2016 IPMI PGM’s in Mobility Conference

31% Increase next decade


2018 IPMI PGM’s in Mobility RecapMitsubishi’s Jonathan Butler

Peak LDV ICE Demand 2026

ICE Engines – Gasoline + Diesel + Hybrids + PHEV

BEV


PGM’s

(000’s Toz)

2014 370t

PGM’s

JM’s Peter DuncanIPMI PGM’s In Mobility Conference 2016:


GFMS: Emission Standards Roadmap 2025IPMI PGM’s in Mobility Conference 2016

LDV

HDV


0.00

0.05

0.10

0.15

0.20

0.25

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

PM (g/mile)

EU USA EPA National US CARB Japan China National

0

1

2

3

4

5

6

7

8

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

CO (g/miles)


0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

NOx (g/mile)


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

HC + NOx (g/mile)


Global Emission Standards – Key Metrics

Particulate Matter g/mile

Europe

USA

ChinaUSA CARB Japan

Carbon Dioxide g/mile

Nitrogen Oxides g/mile Hydrocarbons + NOX g/mile

On LDV’s, Rhodium is the key to NOx. No easy work arounds


European Light Duty Vehicles (JM 2016)

Grams

PGM’s

LDV-Gas

LDV-Diesel

Eu

ro 6

b

Eu

ro 6

c


USA PGM Loadings Reference

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

2

4

6

8

10

Actual Low Med High Low Med High

2011 2020 2025

Disp

lacem

en

t (Liters)

Gra

ms

/ LD

V

USA LDV GasolineDOE EERE Loadings Assesment

Grams Pt per Gas LDV Grams Pd per Gas LDVGrams Rh per Gas LDV Enginer Volume (Liters)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

2

4

6

8

10

12

Actual Low Med High Low Med High

2011 2020 2025

Disp

lacem

en

t (Liters)

Gra

ms

/ LD

V

USA LDV Diesel DOE EERE Loadings Assesment

Grams Pt / Diesel LDV Grams Pd/ Diesel LDVGrams Rh/ Diesel LDV Enginer Volume (Liters)

Gasoline Pd Intensive

Diesel Pt Intensive LDV Gas Design

Window: Pt : Pd : Rh

5.5% : 89% : 5.5%53% : 40% : 7%

LDV Diesel Design Window:

Pt : Pd : Rh74% : 22% : 4%

Pt

Pd

Rh

Pt

Pd

Rh


GFMS: PGM Global Loadings Average2016 IPMI PGM’s In Mobility Conference

PGM

grams

Palladium

Platinum

Rhodium

Forecast ~+9% Higher Loadings


1,600

1,650

1,700

1,750

1,800

1,850

1,900

1,950

2,000

2,050

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Dsip

lacemen

t CC's

PG

M g

ram

sGlobal LDV Gasoline ICE PGM Loadings Trend

Pt g Pd g Rh g PGM g/L Displacement

Fact Check: Newly Created Auto Catalyst Model

Higher Palladium Loadings per LDV

Decreasing Engine Size

Increasing Loadings g/L

Decreasing Palladium per LDV

Will there be Pt Pd

design swaps? I think yes.


JM: Alternative Powertrain PGM ConsumptionIPMI PGMS In Mobility Conference 2016

PGM Loadings

More

More

Zero PGMs

10-15% Higher PGM’s

Gas TWC ~0.8 gr PtVersus

FCV 30-80 gr Pt

Fact

Check

R

R

R

RQ

R

LMC now 1.4M in 2018, actual 1.7M in 2018

3.4M already 2018

Slowed, now 24k in 2025


0

20

40

60

80

100

120

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Mill

ions

Global LDV Powertrain Mix Forecast

Gasoline Diesel Hybrid FCEV BEV

LDV Powertrain Mix Transition

Source: LMC Auto

Increasing g/LGasoline LDV

Loadings

Fewer Pt Intensive Diesels

Hybrids 15%+ PGMs

BEV’s No PGMs


Previous IPMI Seminar Key Highlights

Increasing vehicle sales

Tightening vehicle emission standards

NOx standards are dramatically lower

New powertrain/engine features drive higher loadings

PGM Loadings g/Liter or g/Vehicle creep

India and China adoption of “real” emission standards

Transition from LDV Diesel to Hybrids (Reduced Pt more Pd), but Hybrids use 15%+ or more PGM’s

Emerging BEV market (No PGM’s)

PGM Demand Impact


Outline Today






• Additional Concerns

• Current Events



Auto Catalyst Global Demand Model Comparison 2016-’19

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

2016 2017 2018 2019

Platinum Auto Catalyst Demand Forecast (000's Toz)

Matt's Model Analyst 1 Analyst 2 Analyst 3 Analyst 4

6,500

7,000

7,500

8,000

8,500

9,000

2016 2017 2018 2019

Palladium Auto Catalyst Demand Forecast (000's Toz)


700

720

740

760

780

800

820

840

860

880

900

2016 2017 2018 2019

Rhodium Auto Catalyst Demand Forecast (000's Toz)


Pt down

Rh creeping up

Pd demand up


$500

$700

$900

$1,100

$1,300

$1,500A

pr-1

7

May

-17

Jun-

17

Jul-1

7

Aug

-17

Sep-

17

Oct

-17

Nov

-17

Dec

-17

Jan-

18

Feb-

18

Mar

-18

Apr

-18

May

-18

Jun-

18

Jul-1

8

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19

Platinum & Palladium Fix ($/Toz)

Market Since Leaving IPMI 2016 Auto Catalyst Seminar

IPMI 2016 ATL

IPMI 2019 ATL

Lot’s of discussion of Pt for Pd Design Swapping model

year 2018 What Happened starting 2019 model year?

EU, Japan and ROW Pd Demand

is Up.

China & USA Pddemand has been

flatBASF US$ Fix

$/Toz


Apr

-17

May

-17

Jun-

17

Jul-1

7

Aug

-17

Sep-

17

Oct

-17

Nov

-17

Dec

-17

Jan-

18

Feb-

18

Mar

-18

Apr

-18

May

-18

Jun-

18

Jul-1

8

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Rhodium Fix ($/Toz)

Market Since Leaving IPMI 2016 Auto Catalyst Seminar

IPMI 2016 ATL

IPMI 2019 ATL

What Happened starting 2019model year?

China and global Hybrid Rh

Demand is up.

BASF US$ Fix

$/Toz


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

f

2021

f

2023

f

2025

f

Auto Catalyst Demand As % Global Supply

Pt Demand % Supply Pd Demand % Supply Rh Demand % Supply

Pt

RhPd

Matt’s Auto Catalyst Demand model forecast

1975 1985 1995 2005 2015Platinum 14% 33% 36% 51% 40%

Palladium 0% 12% 29% 48% 81%

Rodium 0% 55% 91% 86% 84%

Auto Catalyst PGM Demand as % of Global Supply

Using todays PGM Ratio’s / design trajectory


PGM Total Supply Illustrating Importance of Recycle

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

20

19

f

20

21

f

20

23

f

20

25

f

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pa

lla

diu

m S

up

ply

(0

00

's T

oz)

Pa

llad

ium

De

ma

nd

% O

f Sup

ply

Palladium Autocat Demand as Percent of Supply

Pd Mined Supply Pd Recycle

Pd Demand % Supply

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

200

400

600

800

1,000

1,200

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

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15

20

17

20

19

f

20

21

f

20

23

f

20

25

f

Rh

od

ium

De

ma

nd

% o

f Sup

plyR

ho

diu

m S

up

ply

(0

00

's T

oz)

Rhodium Autocat Demand as Percent of Supply

Rh Mined Supply

Rh Recycle

Rh Demand % Supply

Pd

Rh


Market Response Since April 2016 IPMI

Palladium and Rhodium Markets have climbed substantially.

Rhodium up 3x

Palladium up 66%

Palladium overtook Platinum (and Gold) in price.

Platinum has indeed softened (~ down 11%)

Now my next fears:

Are we driving Rh and Pd off a cliff ?

Is there enough PGM’s to meet demand ?


Outline Today







• Current Events



2018 IPMI PGM’s in Mobility RecapMitsubishi’s Jonathan Butler

Pd Structural Deficit remain through 2023

What about Rhodium Jonathan?

He will tell us today.


2018 IPMI PGM’s in Mobility RecapCPM Group: Rohit Savant

Pd Structural Surplus since 2002 through 2050 was an odd analysis.

Rh structural deficit 2014 through 2036 sure looks correct

Pd Surplus/Deficit Rh Surplus/Deficit

I Don’t Believe


(2,000)

(1,500)

(1,000)

(500)

-

500

1,000

1,500

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Surplus / Deficit Trend (000's Toz)

Platinum Palladium Rhodium

PGM Surplus/Deficit (000’s Toz)

Surp

lus

Defic

it

Balance

Palladium


-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Surplus / Deficit Trend as a Percent of Total Supply

Platinum Palladium Rhodium

PGM Surplus/Deficit as % of Supply

Balance

Surp

lus

Defic

it

Palladium

Pt Pd Design Swap starting 2022 is easy adjustment. Designers working on it.Rhodium thrifting or replacement is far greater difficulty.


Surplus/Deficit Conclusions Collectors / Recyclers

Demand outlook, and therefore price outlook is strong

Hybrids will be an exceptional growth opportunity

Are there other recycle streams other than just Auto Catalyst to help bridge Pd

and Rh demands?

E-Waste 40% N. America, 25% EU, and lower ROW

Growing Automotive Electronics Content. $3k per car growing to $6k.

Refiners

Optimize Pd and Rh outturns. Recycle key to connecting demand.

Analysts

Sharpen Rh Supply/Demand models & views of critical shortage.

Historical Rh models perhaps are weak.

Design Ratio’s: We know Pt can swap on gasoline and hybrids for Pd in the

design, and will. When and how much?


Outline Today







• Current Events



-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f

Tho

usa

nd

s

Platinum Group Metals Mined Supply (000's Toz)

Platinum Paladium Rhodium Ruthenium Iridium Osmium

9.5% delta

>14M Toz

*2014:

21

-W

eek

S.A

. str

ike


Buy #2

PGM PRODUCER CHANGES

1970’S - 2016

#1 Anglo American

(1917)

#2 Impala (1967)

#3 Lonmin (1909)

#4 Norilsk Nickel

(1935)

#5 Aquarius (1920)

#7 Stillwater

2016 - 2018

#1 Anglo American

#2 Lonmin (loosing $$)

#3 Sibanye –Stillwater

#4 Impala

#5 NorNickel

JUNE 2019

#1 Anglo American

#2 Sibanye–Stillwater

#3 Impala

#4 NorNickel


-100%

0%

100%

200%

300%

400%

500%

600%

Jan-

17

Apr

-17

Jul-1

7

Oct

-17

Jan-

18

Apr

-18

Jul-1

8

Oct

-18

Jan-

19

Precious Metals Since 2017

Platinum Palladium Rhodium Iridium

Ruthenium Gold Silver

The Real Action Is On Pd + Minor PGM’sPrecious Metals Since Jan’17

Pt -6%

Ir +120%

Au +18%

Ag -5%

Palladium and PGM Minor Metals Huge Movement

in Fix


0

2,000

4,000

6,000

8,000

10,000

12,000

South Africa Zimbabwe Russia North America Others

Global 2018 PGM Mining By Country (000's Toz)

Pt Pd Rh

PGM Mining By Country

S. Africa & ZimbabweDominating mined supply of the four PGM Minors Metals:1. Rhodium2. Ruthenium3. Iridium4. Osmium

0

100

200

300

400

500

600

700


Global 2018 PGM Mining By Country (000's Toz)

Rh


These are 4E ounces mined (Pt + Pd + Rh + Au)Ru Ir and Os are impacted proportionally

S. African UG2 Reef PGM Mining Scheduled Declines

Example S. African Mine EOL ImpactExample S. African Mine Prod. Schedule

2021 2023 2024 2026 2028 2030 2032 2034 2036


S. African Bushveld Complex

Rustenberg

Kroondall

Mototolo

Marula

Lease Area

Planned slowdown 2020-2027 leading to EOL maintenance mode

Most near term EOL slowdowns and shutdowns on UG2 Reef

Prill Table Reef Summary

Prill Table Reef Summary

Two new S. African mines coming online are both Norther Limb.

Zimbabwe low minor PGM content too.


0

100

200

300

400

500

600

700

800

900

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Rhodium Global Supply (000's Toz)


500

550

600

650

700

750

800

850

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Rhodium Global Supply (000's Toz)


Rhodium Mined Supply

S. Africa

S. Africa

Zimbabwe

Russia

N. America


PGM Analysts:

We need to be sharp on supply side.

Current operations are all pushing output 2-3%.

New Pipeline Project – Precision in forecast. Stay current with changing

conditions.

Declining S.A. Mining – be careful with PGM minors Rh and Ru & Ir.

Do we collectively encourage more S. African and Zimbabwe projects?

Tough sell with more N. American and Russian low cost Pd/Pt mining

coming online.

We all need to worry about mining disruptions in 2019.

Sibanye-Stillwater Lonmin acquisition outcome.


Outline Today







• Current Events



Fiat-Chrysler March’19 Recall

• Announced: 966k vehicles

impacted. Catalytic

Converter needs

replacement.

• Actual 1.9M sold in USA

and Canada from years of

affected models.

• PGM Toz Weight Affected

966k 1.9M

7k 14k Pt

112k 231k Pd

7k 14k Rh

Chryster-Fiat claim number of vehicles impacted is 966,000

LMC Automotive historical N. American shipment data shows 1,904,044 of the models mentioned sold.

PGM Toz Impact Using 966,000 Assuming all 1,904,044

Platinum 6,914 13,629 761 1,499

Palladium 111,887 220,536 12,308 24,259

Rhodium 6,914 13,629 761 1,499

LMC Auto Sales/Shipment Data

Start End Model 2011 2012 2013 2014 2015 2016 Total

2011 2016 Dodge Jouneys 32,614 51,960 53,743 50,001 53,173 25,872 267,363

2011 2014 Chrystler 200's 70,935 104,243 88,501 153,425 417,104

2011 2016 Compass 103,037 106,515 130,349 111,536 62,223 - 513,660

2011 2016 Patriots 82,016 95,157 124,186 109,311 77,327 28,549 516,546

2011 2012 Dodge Avenger 75790 113581 189,371

364,392 471,456 396,779 424,273 192,723 54,421 1,904,044

LMC Auto Sales/Shipment Data

Start End Model 2011 2012 2013 2014 2015 2016 Average

2011 2016 Dodge Jouneys 2,360 2,360 2,360 2,360 2,360 2,360 2,360

2011 2014 Chrystler 200's 2,360 2,360 2,360 2,676 2,476

2011 2016 Compass 2,286 2,279 2,290 2,284 2,284 2,284 2,284

2011 2016 Patriots 2,360 2,230 2,209 2,168 3,787 3,787 2,473

2011 2012 Dodge Avenger 2,687 2,699 2,695

2,407 2,397 2,290 2,405 2,906 2,360 2,429

Auto Catalyst Loadings Model

Average Engine Size (CC's)

Chrystler Recall PGM Impact

TOTAL

N. American Gasoline ICE Engine Sales Volume

Average

• Impacted weights will get recycled, with standard refine losses. • Effect will be spread out over time. • California effect will be more dramatic and immediate.


Supply Risk: S. African Mine Disruption in 2019

• New PGM Kid On the Block – Sibanye-Stillwater.

• Union (AMCU) Opposition to #3 Sibanye-Stillwater

acquisition of #2 PGM producer Lonmin. April 2 court

hearing on dispute.

• Meanwhile, AMCU strikes at Sibanye Gold mines continues

into 4th month.

• Sibanye has recently stated it will close very deep shaft gold mine

earlier than planned due to cost. This was once S. Africa’s most

productive gold mine.

• April 2019 next round of national union negotiations present

new additional risk. This is an industry wide negotiation for

the next three years.


Auto Catalyst Recycle Industry Re-Alignment. Great Networking Topics.

1. Pressure on collectors started back in 2017 with a tightening of the

banking compliance.

1. Multiple issues of failed compliance cost the banking sector significant damage. Resulting push

for lending/hedging/trading with only publicly listed corporations with high credit ratings hurt

many collectors and recyclers.

2. Mairec USA Lawsuit and ripple implications

3. Stillwater realignment of smelting & refining towards mined ore, and away

from auto catalyst recycle. Stems from $500M June’18 deal with Wheaton.

4. Delayed ramp of new Plasma Furnace/collector issues.

Net: Much of the recycle weight has moved to larger established

players creating a backlog of smaller lots, and assay’s.


March 27-29 Precious Metals Market Declines

• Pt neutral

• Pd -9.7% USD -8.6% GBP -8.9% Euro

• Rh -7.5% USD

Reasons for the Market Decline:

1. Profit Taking by Investors, Pd/Rh market likely a

little overbaked.

2. China 2H2018 into 2019 YTD LDV Sales –10% and

slower than expected Global Sales.

3. Also some movement in currency, strong US $

Note: Imagine if the US/China Trade deal was resolved

and global economy was humming like the USA is

today.

• Should have sold 8.5M more LDV’s if we

maintained earlier CAGR. At current loadings =

• 24k Toz of Pt, 428k Toz of Pd, 34k Toz of Rh

-20%

-10%

0%

10%

20%

30%

40%

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

Oct

-18

Jan

-19

Mill

ion

s

China LDV Sales

Volume y/y Change

y/y%

y/y%

2014 2015 2016 2017 2018 2019


Outline Today







• Current Events



1,500

2,000

2,500

3,000

3,500

4,000

4,500

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Plat

inum

Toz

(000

's)

Platinum Forecast Vs Competitor Reports/Forecasts


Auto Catalyst Platinum Demand Comparison of Analyst Views

Will there be Pt Pd


This Analyst #4 predicted more Pt Pd Design Swaps

LDV Gas Design Window:

Pt : Pd : Rh5.5% : 89% : 5.5%53% : 40% : 7%

Present Loadings Ratios & Trajectory


Auto Catalyst Palladium Demand Comparison of Analyst Views

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Palla

dium

Toz

(000

's)

Palladium Forecast Vs Competitor Reports/Forecasts

Matt's Model Analyst 1 Analyst 2

Analyst 3 Analyst 4

LDV Gas Design Window:

Pt : Pd : Rh5.5% : 89% : 5.5%53% : 40% : 7%

Will there be Pt Pd




Auto Catalyst Rhodium Demand Comparison of Analyst Views

400

500

600

700

800

900

1,000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Rhod

ium

Toz

(000

's)

Rhodium Forecast Vs Competitor Reports/Forecasts

Matt's Model Analyst 1 Analyst 2

Analyst 3 Analyst 4

Yikes!Any thrifting

or design alternatives?



Auto Catalyst Pt Demand By Sector

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Platinum Demand (00's Toz) By Transortation Sector

Diesel Gasoline Hybrid HDV ON-Road HDV OFF-Road Motorcycle

Pt Pddesign swaps?

-

2,000

4,000

6,000

8,000

10,000

12,000

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Palladium Demand (00's Toz) By Transortation Sector


-

200

400

600

800

1,000

1,200

1,400

1,600

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Rhodium Demand (00's Toz) By Transortation Sector


Pt Pdswaps?

Yikes!


Conclusion

• PGM Demand from auto catalysts is safe for another decade.

• Auto Catalyst demand for Pd and Rh both is stressing the market

price.

• Imagine if China GDP and Trade War issues were resolved. Auto

Catalyst Demand would be significantly higher.

• Pt Pd swaps very likely for 2022 model years in USA and EU. All

big-auto groups are working on these designs now.

• Rh demand specifically for NOx reduction has no clear technical work

arounds. Mined Rh supply is limited and likely declining over the

next decade. Rh recycle will be crucial to meeting future Rh market

demand.


Speakers: Auto Catalyst• Matt Watson – PMCM LLCC PGM’s Market Overview

Setting the Plate for This Year’s Conference

• Philip Newman, Metals Focus PGM Mining & Supply Outlook

Networking Break 30 Minutes

• Stewart Brown, JM Future Complexities of Auto Catalyst Config.’s,

Their Impact on PGM, & the Implications for Collectors

• Dr. Brad Edgar, 44 Energy Technologies Trends in Catalyst Technology Innovation & Possible

Impacts PGM

Lunch Provided - 1 Hour

• A. Semih Sunkar Dowa / Nippon PGM Customizing the Pt Recycling, A Future Outlook

• Oliver Krestin, Hensel Recycling Catalyst Recycle Processing and Challenges

Networking Break 30 Minutes

• Michelle Lynch, Enabled Futures Limited Recycling of Automotive Catalysts and Fuel Cells

• Jonathan Butler, Mitsubishi Outlook for Precious Metals in Automotive Catalyst

& Fuel Cells

• Panel: Auto Catalyst Materials & Markets, the Next 5-Years


BACKUP SLIDES


Fact Check: LDV Forecast Demand By Region

-

20

40

60

80

100

120

140

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Mill

ions

LMC Auto: TOTAL Light Duty Vehicle Sales Forecast

N.America EU Japan China ROW

N. America + Mexico

Europe

Japan

LMC Auto 2018

2018 ICE was down.China 2H 2018 -10% y/y with 1.8M

global BEV’s


4-Wheel Vehicles Per Capita

0

100

200

300

400

500

600

700

800

900

Uni

ted

Stat

es

Cana

da

Paci

fic

Wes

tern

Eur

ope

East

ern

Euro

pe

Braz

il *

Cent

ral &

Sou

th A

mer

ica

Asi

a, M

iddl

e Ea

st *

Chin

a **

Asi

a, F

ar E

ast *

Indo

nesi

a **

Afr

ica

*

Indi

a **

Vehicles Per Capita (per 1,000)

1999 2006 2016

Growing 2-Wheel Demand

Where will that growth come from?


-

20

40

60

80

100

120

140

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Mill

ion

s

LMC Auto: LDV Gasoline ICE Only - Sales Forecast

China N.America EU Japan ROW

Fact Check: LDV Gasoline ICE Demand By Region

N. America + Mexico

Europe

Japan

LMC Auto 2018 1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

2,400

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Average Engine Size CC's

Gasoline Diesel Hybrid

Global Ave Displacement• Diesel 2.2 L

• Hybrid 2.1 L 1.9 L• Gasoline 2.0L 1.8 L

Diesel

Hybrids

LMC Auto 2018


Transition from Diesel LDV to Hybrids

-

5

10

15

20

25

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Mill

ion

s

LMC Auto: LDV Diesel ICE Only - Sales Forecast


Europe

LMC Auto 2018

-

5

10

15

20

25

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Mill

ion

s

LMC Auto: LDV ICE Hybrids - Sales Forecast


China

Diesel Auto Catalyst Loadings are Pt dominate (74:22:4 Pt:Pd:Rh)

Gasoline & Hybrid Auto Catalyst Loadings are Pd dominate

LMC Auto 2018

LMC Auto 2018


BEV’s & FCEV’s Forecast Demand By Region

-

1

2

3

4

5

6

7

8

9

10

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

Mill

ion

s

LMC: LDV Battery Electric Vehicles (BEV's) Forecast


0

5,000

10,000

15,000

20,000

25,000

30,000

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

LMC Auto: LDV Fuel Cell Vehicles (FCEV's) ForecastChina N.America EU Japan ROW

FCEV scale in actual units sold. Small number.Matt forecasts close to 1M/year by 2025.

China 1M 2018 alone. China on pace for 2M in 2019.

LMC Auto 2018

LMC Auto 2018

Many units made in Japan but sold to USA (California) and EU.New announcements from China, EU, S. Korea and USA could see this ramp accelerated.


Fact Check: HDV - Heavy Duty On-Road

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Mill

ions

KGP: Heavy Duty (HDV) On Road - Sales ForecastChina N.America EU Japan ROW

KPG HDV Off Road

Source: KPG HDV On Road5,000

7,000

9,000

11,000

13,000

2005

2006

2007

2008

200

9

2010

2011

2012

2013

2014

201

5

2016

2017

2018

2019

2020

202

1

2022

2023

2024

2025

HDV ON-Road Engine Size (CC's)

China N.AmericaEU JapanROW Global

Global Ave Displacement• 6-11 liter average size

displacement depending on region

KPG HDV On Road 2018

N. America + Mexico

China

Europe


Fact Check: HDV - Heavy Duty Off-Road

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Mill

ions

KGP: Heavy Duty (HDV) Off Road - Sales ForecastChina N.America EU Japan ROW

Source: KPG HDV Off Road2,000

3,000

4,000

5,000

6,000

7,000

8,000

2005

2006

2007

2008

2009

2010

2011

2012

2013

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

202

3

202

4

202

5

HDV OFF-Road Engine Size (CC's)

China N.America EU

Japan ROW Global

Global Ave Displacement• 3-6 liter average size

displacement depending on region

KPG HDV Off Road 2018

Europe

China


Note: Asia Has High Density of 2-Wheel Vehicles

0

10

20

30

40

50

60

70

8020

05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Mill

ions

Motorcycle - Sales ForecastChina N.America EU Japan ROW

Indonesia, Taiwan, SE. Thailand, and India are the key drivers of 2-wheel

China

Global Ave Displacement• Asia mostly <150cc

Engine Size

• EU and N. America average >600cc

Multiple online sources

Rest Of World (ROW)


US and EU Average age vehicle on Road

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

f2

02

0f

20

21

f2

02

2f

USA Average Vehicle Age On Road

USA Pasenger Cars USA Light Trucks USA All LDV's

6

7

8

9

10

11

12

13

2000 2005 2010 2016 2014 2015 2016

EU Average LDV Age On The Road

USA Pasenger Cars EU Pasenger Cars EU LDV's EU HDV's

Diesel has 1.5 year shorter life span than gasoline

Vehicles lasting longer impacting recycle

Documents

PGM’s Market Overview: Setting The Plate For The IPMI 2019 … · 2019. 8. 3. · PGM’s Market Overview: Setting The Plate For The IPMI 2019 Auto Catalyst & Fuel Cell Seminar