BM Catalysts on global precious metal chess game

BM Catalysts is advising the European aftermarket to prepare for a renewed phase of volatility in global precious metal supply chains, as investor flows into “safe-haven” assets along with persistent mining challenges continue to influence the cost and availability of key materials used in catalytic converters.

The industry’s dependence on platinum group metals (PGMs) rhodium, palladium and platinum, remains a fundamental vulnerability. These rare materials are critical to emissions control technologies, yet their supply and pricing are now shaped by much broader global economic forces than traditional mining and manufacturing cycles.

Mark Blinston, Commercial Director at BM Catalysts, said: “We’re now operating in a world where precious metals have dual identities, they’re both essential industrial materials and sought-after financial assets.

“That connection means external pressures, from global markets to investor sentiment, can have a direct effect on the cost base of catalytic converter production.”

Global supply of PGMs remains tight. Over 70 percent of the world’s platinum and rhodium originates from South Africa, where recurring power outages, infrastructure challenges, and labour disputes continue to disrupt production. Russia’s palladium output remains constrained by sanctions and logistical hurdles, while China’s industrial recovery and environmental policy shifts have created stronger internal demand for PGMs, tightening global availability.

In this environment, prices for key metals have edged upward again in 2025. Rhodium is currently trading at around $8,300 per troy ounce which is over 73% higher than 12 months ago. Palladium and platinum priced at approximately $1,553 and $1,643 respectively. Platinum alone has seen gains of over 65% over the last 12 months, reflecting renewed industrial and investor interest.

PGMs can account for as much as 90 percent of the total production cost of a catalytic converter.

One of the key factors driving renewed pressure across metal markets is the shift of global investment capital into safe-haven assets such as gold. With global equity markets showing signs of fatigue and concerns mounting over the long-term impact of artificial intelligence and automation on the economy, investors are seeking security in tangible commodities.

As gold prices reach record highs, this sentiment often extends to other precious metals, including PGMs. Financial institutions, sovereign funds, and private investors increasingly view rhodium, platinum and palladium as complementary or alternative investment options, amplifying volatility in metals traditionally viewed through an industrial lens.

“When investors turn to gold for safety, the momentum tends to spill over into other metals,” said Blinston.

He added: “That makes the PGM market more reactive to global economic signals, and the aftermarket needs to understand how those shifts can filter through to component costs.”

These combined forces, constrained mining output, speculative investment, and rising industrial demand, are shaping a more volatile landscape for the aftermarket. The effects are already visible in the form of cost pressures and tighter margins.

BM Catalysts believes that building resilience in this environment will depend on strategic procurement, education, and collaboration.

Blinston said: “Price movements will always attract attention, but our priority is to ensure transparency and stability.

“We continue to refine our sourcing and buying models to reflect real market conditions while maintaining dependable supply and quality for our customers.

“The dynamics we’re seeing aren’t short-term spikes, they’re part of a structural shift,” concluded Blinston.

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