The Bullish Case for Platinum

Platinum has fallen below the 1:1 historical average — and well below the 1:1.75 average it held in the past decade. It now trades at less than 1.
Here is how gold versus platinum ETFs have performed over the past year:

Couple increased jewelry sales with the idea that Japan will be back in the auto business, and you have a bullish demand scenario.
The Polk company has forecast global car sales will hit 77.7 million units in 2012, up about 7% over 2011.
Scotia Economics expects global sales to increase 4% this year; LMC Automotive puts the increase at 6.5%.
Morgan Stanley estimates “about 3.82 million ounces of platinum will go into auto catalysts, 17 percent more than this year and the most since 2007.”

Platinum's fundamentals look strong as the demand outlook remains robust as its industrial uses continue to expand at a healthy rate of between 6% and 15% depending on the application. Platinum's industrial base is thriving with auto catalysts remaining in healthy demand and accounts for approximately 49% of platinum consumption. In addition approximately 26% of platinum consumption is tied up in other industrial applications, such as the glass, electronics, petroleum, and chemical industries, and these are growing collectively at a steady 6% annually. Much of the technology that platinum is used for are new and advanced technologies and is expected to see growth of approximately 3%. We also expect continued strong demand for jewelry to drive this market higher. "There is an increasing interest among domestic consumers for platinum jewellery. Frequent price fluctuations in gold and silver seems to have drew attention of jewellery buyers towards platinum-based diamond jewellery.However, the trend is at its nascent stage, but we can see this trend rising over a period of time," said a Surat-based diamond jewellery maker.Platinum jewelry is expected to make up 25%-30% of the total Indian jewelry sales in 2012. This comes in a market in which total jewelry sales in India are growing about 12 percent a year

The catalytic properties of the six platinum group metals (PGM)- iridium, osmium, palladium, platinum, rhodium, and ruthenium - are out standing. Platinum's wear and tarnish resistance characteristics are well suited for making fine jewelry. Other distinctive properties include resistance to chemical attack, excellent high-temperature characteristics, and stable electrical properties. All these properties have been exploited for industrial applications. Platinum, platinum alloys, and iridium are used as crucible materials for the growth of single crystals, especially oxides. The chemical industry uses a significant amount of either platinum or a platinum-rhodium alloy catalyst in the form of gauze to catalyze the partial oxidation of ammonia to yield nitric oxide, which is the raw material for fertilizers, explosives, and nitric acid. In recent years, a number of PGM have become important as catalysts in synthetic organic chemistry. Platinum supported catalysts are used in the refining of crude oil, reforming, and other processes used in the production of high-octane gasoline and aromatic compounds for the petrochemical industry. Since 1979, the automotive industry has emerged as the principal consumer of PGM. Palladium, platinum, and rhodium have been used as oxidation catalyst in catalytic converters to treat automobile exhaust emissions. A wide range of PGM alloy compositions is used in low-voltage and low-energy contacts, thick- and thin-film circuits, thermocouples and furnace components, and electrodes.