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How the Commodities Markets (Platinum) are Affected by the Combustion Integrated Electric Cars?

By:
FX Empire Editorial Board
Published: Dec 21, 2015, 10:56 GMT+00:00

The main use of platinum is in catalytic converters to reduce emissions, especially from diesel vehicles.The main use of platinum, is a fuel-cell electric

How the Commodities Markets (Platinum) are Affected by the Combustion Integrated Electric Cars?

The main use of platinum is in catalytic converters to reduce emissions, especially from diesel vehicles.
The main use of platinum, is a fuel-cell electric vehicles incorporating combustion.
Brief overview on the use of platinum in the automotive industry:

Catalytic converters:

Catalytic converter is an emissions control device that converts toxic pollutants in exhaust gas to less toxic pollutants. The catalyst itself is most often a mix of precious metals. Platinum is the most active catalyst and is widely used.

How the Commodities Markets (Platinum) are Affected by the Combustion Integrated Electric Cars?
How the Commodities Markets (Platinum) are Affected by the Combustion Integrated Electric Cars?

Fuel-cell:

The most researched type is the proton exchange membrane (PEM) fuel cell, which contains platinum catalysts. PEM fuel cells are capable of being used in power generation for buildings, instead of batteries or generators in portable equipment and as replacements for the internal Fuel-cell powered cars use between 3-7 times more platinum than a diesel catalytic converter, which the fuel cell is a device that produces electricity and heat by electrochemically reacting a fuel (generally hydrogen or hydrogen-rich) with oxygen. Unlike a conventional engine, it does this without burning the fuel and can therefore be more efficient and cleaner. Typically uses three to seven gram.

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Volkswagen The scandal:

 

On 18 September 2015, the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group, after it was found that the automaker had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate certain emissions controls only during laboratory emissions testing. The programming caused the vehicles’ nitrogen oxide (NOx) output to meet US standards during regulatory testing, but emit up to 40 times more NOx in real-world driving. Volkswagen put this programming in about eleven million cars worldwide, and in 500,000 in the United States, during model years 2009 through 2015.

The company plans to finish fixing them by the end of 2016 the markets.

 

Volkswagen vehicles represent a third of the Volkswagen group sales. Obviously, the diesel engine scandal will hit the company’s profits, and legal claims can reach billions of dollars. The company has already announced that it plans to take a €6.5 billion charge in the third quarter to cover the necessary services measures and other efforts to win back the trust of its customers. Also, the company says it is actively working to “clarify irregularities” on its 11 million diesel cars worldwide.

Last data from the European Automobile Manufacturers’ Association showed new-car registrations in the region increased 14 percent in November from a year earlier. In China, total vehicle sales surged 20 percent, a report showed December 10.

Vehicle catalysts made up 40% of the demand for platinum last year, with demand for platinum in catalysts rising 4% last year, the fastest rate of growth since 2011.

PLATINUM:

 

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Platinum is a chemical element with symbol Pt, mostly in South Africa, which accounts for 80% of the world production. Because of its scarcity in Earth’s crust, only a few hundred tones are produced annually, and given its important uses, it is highly valuable and is a major precious metal commodity.

Platinum xpt/usd price remains negative as we are close to 1100 and 1080 levels main support previous level, therefore, the price below those  current support level will take the negative momentum to achieve lower prices Expected trading range price will go down to see the lower bands at 630 area.

From close look on the chart the price target remain negative, The lowest price of platinum is a catalyst for further investment in this technology, as countries contain strict rules on air pollution and decrease exhaust emissions from transportation garments and gives incentives to manufacturers ‘environmentally friendly’.

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The company is still in the process of acute crisis cannot know how it will end, time will tell.

Business point we’d seen companies who have strayed and cheated and managed to cross the hurdle, there are even those who did not survive and ceased to exist.

I’m most of the time analysis the price from the technical side.

Economically addition to the costs incurred due to the current crisis, we must not forget production increases are also declining in terms of low world raw prices such as copper, platinum, In addition, the emphasis on development of electric vehicles could help push the company in the right direction.

Volkswagen’s production capacity increased because the rate of the euro falls = supports increasing exports, competitiveness, attractive pricing, and compliance with, the future expectations of selling new cars in the world.

From the technical view: the nearest resistance stays in 131 area after we should pay attention to 147-150 and above it to 180 area the major resistance.

Near support stay in 115 and below it 103-109 area.

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Volkswagen manufactures vehicles worldwide – costs in Euro – Euro weakened steadily against the dollar – a reduction factors of production , on the other hand falling commodity prices ,contributes to reducing costs, and increasing export capacity – lower the vehicle price in dollars  gives greater competitiveness and a better chance for recovery from the scandal.

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About the Author

FX Empire editorial team consists of professional analysts with a combined experience of over 45 years in the financial markets, spanning various fields including the equity, forex, commodities, futures and cryptocurrencies markets.

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