LIVE MARKETS-Platinum's time to shine as hybrid vehicles take the front seat -Berenberg

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PLATINUM'S TIME TO SHINE AS HYBRID VEHICLES TAKE THE FRONT SEAT - BERENBERG

Analysts at Berenberg expect the shift towards hybrid vehicles over battery electric vehicles to make the outlook for platinum group metals (PGMs) more compelling than the market is currently pricing in.

PGMs - principally platinum and palladium - both used by automakers in vehicles to reduce harmful emissions - have faced aggressive price volatility in the past decade.

Spot platinum XPT= ended 2024, 8% lower while spot palladium XPD= fell 17% GOL/.

However, Berenberg analysts led by Richard Hatch are optimistic on platinum's growth prospects in next 12-18 months.

"The slowing momentum of BEVs was confirmed in 2024 and we expect that trend to persist in early 2025 until a new product cycle kicks in by mid-2025, continuing in 2026," Berenberg analysts said in a note dated January 22.

While the surge in demand for hybrids is poised to boost demand for platinum, the same cannot be said about palladium as shortage from "traditional geographies" and rising recycling volumes may restrict its growth.

With U.S. President Donald Trump shifting away from the focus on electric vehicles (EV), hybrids may be the short-term winners to compensate for the slowing EV momentum and product launch delays.

"Hydrogen fuel cells use platinum, which could act as a demand driver and potentially add more upside in the longer term."

Berenberg remains cautious on palladium and rhodium and expects a surplus market for the metal in the near future.

(Kanchana Chakravarty)

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