Volkswagen’s emissions scandal has hit the price of platinum — the precious metal used to make diesel catalysts fitted in some of the vehicles at the heart of the affair.
Platinum fell to a six-and-a-half year low of $925.30 a troy ounce on Wednesday, after dropping 4 per cent on Tuesday, its biggest one-day fall in more than two years.
The metal, which is used mostly to make catalysts for diesel vehicles, is already down more than 20 per cent so far this year.
Shares in Johnson Matthey, a maker of car catalysts, have fallen 11.8 per cent this week. They were down 1.9 per cent in morning trading on Wednesday, the worse performer in the FTSE 100 stock index.
Investors are worried VW’s admission it cheated on US emissions tests could hasten the demise of diesel cars in Europe, where they are already under fire in cities such as London and Paris due to air pollution concerns.
“Investors should not underestimate the seriousness of the threat to diesel. Allegations against VW in the US are the latest in a series of events that are steadily undermining the case for the fuel,” Simon Fickling, an analyst at Exane BNP Paribas, said.
Diesel catalyst systems represent about five times the sales value and gross profit as an equivalently-sized gasoline, or gasoline hybrid system, he said. The European catalyst market is likely to peak in 2019, he predicts.
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