Angela BarnesPlatinum and palladium prices dipped sharply on Tuesday as fears mounted over the fall in demand within the automotive sector.
The price of platinum fell to $939.50 per ounce, down 5.83%, while palladium fell to $1,958.50 per ounce, down 1.88%, as at 16.30 BST (UTC + 1).
Contributing factors
Both metals are used in the motor industry, including to manufacture catalytic converters. However, demand in the industry has fallen this year as chronic shortages of other microchips and other vehicle supplies due to the pandemic have disrupted production.
The industry-wide semiconductor chip shortage is causing massive auto production cuts around the globe, and auto industry officials say the problem is getting worse, according to Reuters.
Production cuts
Several leading car-makers have had temporary plant closures or have announced massive production cuts as a result of the ongoing chip shortage.
These include America’s largest car producer, General Motors (GM), which announced earlier this month that it was cutting production across eight of its 15 North American assembly plants as the chip shortage has particularly impacted production of its profitable pickup trucks and sport utility vehicles.
Ford also recently announced it was cutting truck production because of the chip shortage. The automobile giant reported that its August US sales were down 33% as a result of the supply disruption.
Toyota also said last month that it will slash global production in Japan and North America by 40% for two months from September, cutting vehicle production by 360,000 in September alone.
Read more: Aluminium hovers near $3,000 as fears of tight supply linger
