• 4 minutes "Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 5 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 hours Revisiting: "The U.S. Grid Isn’t Ready For A Major Shift To Renewables" from March 2021 by Irina Slav at OILPRICE
  • 3 days How cheap Chinese tires might explain Russia's 'stalled' 40-mile-long military convoy in Ukraine
  • 7 days "The Calm Before The Storm In Oil Markets" by Tom Kool of OILPRICE and seen at YahooFinance
  • 7 days Will Variants and Ill-Health Continue to Plague Economic Outlooks?
  • 18 hours Natural Gas is the Cleanest and most Likely Source of Energy to Fuel the World.
  • 7 days "Russia will stop 'in a moment' if Ukraine meets terms - Kremlin" by Reuters via Yahoo News...but Reuters suddenly cut out the balanced part of the story.
  • 7 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Is Hydrogen The Key To A Greener Shipping Industry?

Is Hydrogen The Key To A Greener Shipping Industry?

Hydrogen production is rising across…

Can Iceland Become The World’s First Green Hydrogen Economy?

Can Iceland Become The World’s First Green Hydrogen Economy?

Blessed with plentiful geothermal energy…

Alex Kimani

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

More Info

Premium Content

Hydrogen Boom Could Lead To New Platinum Bull Market

The diesel industry is dying, and it's taking platinum down with it. Platinum prices have merely been treading water since the Dieselgate scandal thanks to diesel vehicle sales in Europe going on a five-year freefall. The automotive industry is the biggest consumer of platinum, with 44% of the world's supply of the precious metal going into catalytic converters.  But with a dramatic fall in demand, and now Covid-19, the prognosis appears bleak for platinum bulls.

Or, maybe not. 

Whereas platinum is losing its most important customer in diesel, it's about to gain an equally impressive one: Green hydrogen.

Trevor Raymond, head of research at the World Platinum Investment Council (WPIC), has told Kitco that the hydrogen boom is about to provide a new lifeline for platinum.

Platinum / U.S. Dollar 5-Year Change

Source: TradingView

Source: MoneyWeek

The hydrogen sweet spot

Platinum plays a dual role in the budding hydrogen economy: It is used in fuel cells for fuel cell electric vehicles (FCEVs) and in the production of green hydrogen.

Whereas the FCEV market is enjoying an impressive renaissance, it's the green hydrogen sector that's really been hogging the limelight--and for good reason.

Related: The World’s Largest Oil Trader Just Sent LNG Prices Soaring

Green hydrogen is considered a 100% clean fuel because it's produced when renewable energy sources such as wind and solar are used in the electrolysis of water. The IEA estimates that green hydrogen has the potential to save 830 million tonnes of CO2 emitted during the production of grey hydrogen from fossil fuels.

Platinum is used as a catalyst during the electrolysis process to improve performance and improve durability for commercial scale systems. Less than 1% of the world's hydrogen supply is green, meaning the potential to decarbonize the sector is huge. The IEA has chalked in global green hydrogen demand at between 133 million and 158 million tonnes a year by 2050 if it were to completely replace fossil fuels in these sectors.

Scores of global energy heavyweights, including BP, Siemens Energy, Repsol, and Orsted have already outlined their green hydrogen strategies. Meanwhile, U.S.-based Plug Power (NASDAQ:PLUG) has struck a deal with Apex Clean Energy to develop a green hydrogen network using wind power offers a chance to tap into "very low cost" renewable power and helps accelerate the shift to clean energy. 

Three months ago, the European Union set out its new hydrogen strategy as part of its goal to achieve carbon neutrality for all its industries by 2050. 

In a big win for the hydrogen sector, the EU outlined an extremely ambitious target to build out at least 40 gigawatts of electrolyzers within its borders by 2030, or 160x the current global capacity of 250MW. The EU also plans to support the development of another 40 gigawatts of green hydrogen in nearby countries that can export to the region by the same date.

Platinum lagging gold

At a time when precious metals such as gold and silver have been taking out all-time highs, platinum has continued to lag.

Indeed, at a price point of $916/oz, platinum is trading at a big discount to gold's $1,915/oz. That's highly anomalous given that platinum has historically traded at a ~30% premium to gold hence the moniker 'rich man's gold.' A return to the historical average of 1.3x would see platinum climb to nearly $2,500, or 173% higher than current prices.

Other than platinum being oversold, demand/supply factors are also in its favor. In its latest report, the WPIC forecast a supply deficit for the platinum market of around 336,000 ounces, a sharp contrast to its pre-Covid-19 estimate of a surplus of 247,000 ounces. Further, the organization says the ability to increase supply remains extremely limited and could take several years before we see new supply growth.

Maybe Biden winning the elections in November is all it will take to kick start another big platinum rally. But with the hydrogen marketplace predicted to eventually hit $11 trillion, this could be another unstoppable energy megatrend regardless of who wins.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News