11/22/11 Platinum today: Thrifting of precious metals in autocatalysts

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Thrifting of precious metals in autocatal\sts

Updated - 13th January 2009

The announcement by Nissan (in July 2007) of its plans to introduce new, lower pgm, autocatalyst technology on its

gasoline vehicles in late 2008 or early 2009 gathered considerable attention from market commentators and from

the media. In October 2007, Mazda also announced new technology which it also believes will allow it to cut its

autocatalyst metal loadings. In January 2009, the company again announced that it will fits its μSingle Nanocatalyst

Technology¶ to the new Mazda3 vehicle to be launched later this year. However, it is important to note that this

technology is being used solely on the underfloor catalysts used on this vehicle and not across the entire

aftertreatment system. This suggests that the pgm savings made will not be as great as may be implied by the

recent announcement.

Importantly, the catalysts mentioned in both of these announcements use platinum group metals as the active

component and we do not expect that their introduction will affect automotive sector pgm usage.

There are three competing trends relating to platinum group metal usage in the automotive industry:

1:/ Emissions legislation is continuing to tighten all around the world. Whenever new regulations are enacted

somewhere, average precious metal loadings on catalysts tend to rise in response. If this were the only trend, it

would lead to continual increases in metal usage for this application.

2:/ Over the long term the number of vehicles manufactured globally is also rising. As almost every vehicle now fits

at least one catalyst, rising production volumes drives the number of catalysts higher, and increases the amount of

precious metal required by the car industry.

3:/ Opposing these two trends, all of the car companies, in partnership with Johnson Matthey and other catalyst

manufacturers, are continually working to improve the performance of automotive catalytic converters. This

equates to designing catalysts that convert the same amount of pollutants but require a lower precious metal

content to do so. Many of the announcements on new, lower-loaded catalyst technology are simply a recognition of

the effectiveness of this thrifting process which has been ongoing since the first autocatalysts were used in the

1970s.

This third trend has the opposite effect from the others and this cost control or thrifting process (the removal of

precious metal) has been able to keep the growth in platinum group metal requirements from the automotive

industry to manageable levels. Mazda¶s μnanotechnology¶ is a new name, not necessarily a new concept. Catalyst

manufacturers attempts to thrift are ongoing and Johnson Matthey expects them to continue in coming years. Our

view on all of these recent announcements is therefore that they represent something like the degree of thrifting

that could be possible over a short to medium term timescale. However, we do not expect them to materially affect

the positive outlook for increasing platinum group metal demand in the automotive sector.