PGMs Get a Supply Boost - But Prices Keep Climbing

PGMs Get a Supply Boost - But Prices Keep Climbing

A closed-loop PGM recovery operation targeting 30,000-40,000 ounces of platinum-equivalent annually is entering the market just as platinum and palladium post their strongest weekly gains in months.

What to know

• PH7 Technologies is scaling a chemical processing method to recover platinum, palladium, and rhodium from spent catalytic converters and difficult ores, targeting 30,000-40,000 oz platinum-equivalent per year.

• Platinum is trading at $1,999.90/oz (+6.06% this week) and palladium at $1,515.00/oz (+6.84% this week), making secondary PGM recovery increasingly economical.

• The project has secured government backing, indicating policy-level interest in domestic PGM supply chain resilience.

What happened

PH7 Technologies is pushing ahead with a closed-loop chemical processing system designed to extract precious metals - specifically platinum, palladium, and rhodium - from secondary materials including spent catalytic converters and complex, hard-to-treat ores. The operation is targeting annual output of 30,000 to 40,000 ounces of platinum-equivalent material, a meaningful volume in a market where global platinum supply deficits have persisted for three consecutive years.

The technology avoids traditional smelting, instead using a proprietary hydrometallurgical approach that the company positions as both cleaner and more cost-effective. Government funding has been secured to support the scale-up, a detail that elevates this from a niche start-up story to something with genuine policy implications for PGM supply chains.

Who’s involved

PH7 Technologies sits at the intersection of mining technology and recycling - two sectors that have historically operated in silos but are increasingly converging as primary PGM supply tightens. The company’s focus on secondary materials positions it alongside established recyclers like BASF and Umicore, though its chemical process appears to target a different feedstock profile - ores and concentrates that conventional methods struggle with.

Government involvement is notable. State-level backing for PGM recovery projects has been rare outside of South Africa and Russia, the two nations that dominate primary supply. The funding commitment here indicates a broader recognition that PGM supply chains are strategically vulnerable, particularly as automotive and hydrogen fuel cell demand continues to grow.

On the demand side, automakers remain the dominant consumers of palladium and rhodium for catalytic converters, while platinum is gaining traction in the hydrogen economy. Industrial buyers have been watching secondary supply developments closely, given that recycled material already accounts for roughly 25-30% of total PGM supply globally.

Why it matters

Platinum is trading at $1,999.90/oz, up over 6% this week, while palladium has surged nearly 7% to $1,515.00/oz. These are the kind of price levels that make secondary recovery operations not just viable but highly attractive. At current spot prices, PH7’s targeted output of 30,000-40,000 ounces represents roughly $60-80 million in annual revenue potential.

But the broader significance lies in what this project represents for PGM supply dynamics. Primary mine output - overwhelmingly concentrated in South Africa’s Bushveld Complex and Russia’s Norilsk region - has been flat or declining for years. Labour disputes, power shortages, and geopolitical risk have made these sources increasingly unreliable. Any technology that can unlock meaningful volumes from secondary or refractory sources effectively diversifies the supply base.

The closed-loop aspect matters too. Traditional PGM processing generates significant chemical waste and emissions. A cleaner method could ease permitting barriers and attract ESG-focused capital - a real advantage as institutional investors apply tighter sustainability screens to mining-adjacent investments.

For the platinum market specifically, this arrives during a period of structural deficit. The World Platinum Investment Council has flagged consecutive years of undersupply, and above-ground stocks are being drawn down. New secondary supply could ease pressure, but 30,000-40,000 ounces annually - while meaningful - represents less than 1% of total global platinum demand of roughly 7.5 million ounces.

What to watch

Several indicators matter here. First, the pace of PH7’s scale-up - whether they hit nameplate capacity on schedule or face the delays that plague most novel processing technologies. Second, whether other governments follow with similar funding commitments for domestic PGM recovery, which would indicate a genuine policy shift toward supply chain diversification.

On the price side, platinum’s approach to the $2,000 level is a key psychological threshold. If it breaks and holds above that mark, the economics for secondary recovery projects improve further, potentially drawing more entrants into the space. Palladium’s weekly gain of nearly 7% also bears watching - sustained strength above $1,500 would reinforce the bull case for expanded recycling capacity.

Hybrid vehicle production data through Q2 deserves attention - any acceleration would tighten the supply picture further, given hybrids use more PGMs per unit than pure EVs.

This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.