CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Scan to Download iOS&Android APP

Platinum and palladium prices hit as automotive demand falls

By Angela Barnes

14:49, 14 September 2021

Share this article

Subscribe to Weekly Highlights

The major market events for the week ahead right in your inbox. Subscribe
Robots aiding production in a line of cars at an auto production facility
Supply shortages disrupts production and hits commodities – Photo: Shutterstock

Platinum 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.

What is your sentiment on Platinum?

989.83
Bullish
or
Bearish
Vote to see Traders sentiment!

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. 

Oil - Brent

79.77 Price
-3.000% 1D Chg, %
Long position overnight fee 0.0017%
Short position overnight fee -0.0163%
Overnight fee time 22:00 (UTC)
Spread 0.04

Gold

1,865.37 Price
-2.480% 1D Chg, %
Long position overnight fee -0.0221%
Short position overnight fee 0.0092%
Overnight fee time 22:00 (UTC)
Spread 0.33

Oil - Crude

73.41 Price
-3.570% 1D Chg, %
Long position overnight fee -0.0223%
Short position overnight fee 0.0065%
Overnight fee time 22:00 (UTC)
Spread 0.03

Natural Gas

2.41 Price
-2.390% 1D Chg, %
Long position overnight fee -0.1138%
Short position overnight fee 0.0796%
Overnight fee time 22:00 (UTC)
Spread 0.005

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

 

Rate this article

Share this article

Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Latest Commodities news

Still looking for a broker you can trust?

Join the 480.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading