RECOVERY OF METALS FROM SPENT CATALYST

Introduction

Catalysts are indispensable in the petroleum refining and petrochemical industry for
routine production of gasoline, diesel fuels, jet fuels, heavy oil hydrocarbons,
petrochemicals and plastics. Hydrocarbons (HT and HDS) and residue
hydrodesulfurization (RDS) are the major processes for converting crude oil into these
petroleum products. During processing, catalysts will become contaminated with
impurities in the crude oil feed and become deactivated. When that happens, they are
usually sent for regeneration where contaminates are removed. Ultimately, they will be
contaminated with coke, sulfur, vanadium and nickel in a manner and at a level that
makes regeneration impractical. At this stage, catalysts are considered spent and they
may pose significant environmental problems, as landfill disposal is no longer accepted
as best practice. Hydro-desulfurization (HDS/RDS) of heavy oil produces spent
catalysts that contain molybdenum (Mo), vanadium (V), nickel (Ni) or cobalt (Co) at
concentration levels that has been found to be economical for recovery. Due to its
complex nature, metal recovery from HDS/RDS spent catalysts involves a combination
of pyro- and hydro- metallurgical processes. At present, only a handful of companies
are capable to do so on a commercial scale and in an environmentally acceptable
manner. The energy savings and environment benefits associated with these recycling
activities are also quite significant. It has been estimated that recycling of various metal
scraps consumes approximately 33% less energy and generates 60% less pollutants
than the production of virgin material from ore. However with increasing demand of ever
more complex metallic composite and alloy materials in modern manufacturing
processes, it becomes imperative to develop appropriate methods for the recovery of
these valuable metals.

Catalyst demand worldwide

The oil refining industry operation is analyzed in order to estimate the future catalyst
market trends. According to the catalyst Group Research Co, the global refining catalyst
market has grown from $2.32 billion in 2001 to about $2.65 billion in 2005 (3.6% annual
growth). Hydrotreating, fluid catalytic cracking, hydrocracking and isomerization
represent about 74% of the total catalyst market and will grow by about $34, $32, $11
and $2.5 million per year, respectively. Higher catalyst spending growth is expected for
the North America region ($27.5 million per year) Worldwide refiners need to produce
cleaner fuels and operate to meet environmental regulations. Therefore, refineries
should convert more heavy feedstock's to satisfy regional fuel market needs, and
minimize their profit margins which guides the developments in the refining catalyst
market. Refiners require more processing capacity and higher efficiency to satisfy
regional fuel market needs, therefore, more catalyst consumption is needed and in the
same be more resistant to deactivate under sever operating conditions. The refining
catalyst market is the most competitive segment of the global catalyst. This market was
increased at about 1.9% / year during 2001-2007. The data indicate that the current
catalytic processes, hydrotreating, FCC, naphtha reforming, hydrocracking and
isomerization, represent about 77% of the total refining catalyst market. The future
catalyst market increased through 2007- 2008 to about $ 2.58 billion (2.8%/ year). Most
growth occurred in North America, Asia Pacific, and the Middle East.

Refining Processes

Fluid catalytic cracking (FCC) and hydrotreating are the major processes for converting
crude oil into petroleum products. FCC catalysts are ultimately contaminated with coke,
vanadium and nickel in a manner and at a level that makes regeneration impossible.
Hydrotreating heavy oil also produces spent catalysts containing coke, nickel, and
vanadium. In this instance, regeneration may be possible by selective removal of nickel,
vanadium and iron, but irreversible deactivation ultimately occurs. Catalytic cracking
breaks complex hydrocarbons into simpler molecules in order to increase the quality
and quantity of lighter, more desirable products and decrease the amount of residuals.
Catalytic cracking is similar to thermal cracking except that catalysts facilitate the
conversion of the heavier molecules into lighter products. Use of a catalyst in the
cracking reaction increases the yield of improved-quality products under much less
severe operating conditions than in thermal cracking. Typical temperatures are from
850-950 degrees F at much lower pressures of 10-20 psi. The catalysts used in refinery
cracking units are typically solid materials (zeolite, aluminum hydrosilicate, treated
bentonite clay, fuller's earth, bauxite, and silica-alumina) that come in the form of
powders, beads, pellets or shaped materials called extrudites.

Fluid Catalytic Cracking
The most common process is FCC, in which the oil is cracked in the presence of a finely
divided catalyst which is maintained in an aerated or fluidized state by the oil vapors.
The fluid cracker consists of a catalyst section and a fractionating section that operate
together as an integrated processing unit. The catalyst section contains the reactor and
regenerator, which with the standpipe and riser forms the catalyst circulation unit. The
fluid catalyst is continuously circulated between the reactor and the regenerator using
air, oil vapors, and steam as the conveying media. A typical FCC process involves
mixing a preheated hydrocarbon charge with hot, regenerated catalyst as it enters the
riser leading to the reactor. The charge is combined with a recycle stream within the
riser, vaporized, and raised to reactor temperature (900-1,000 degrees F) by the hot
catalyst. As the mixture travels up the riser, the charge is cracked at 10-30 psi. Spent
catalyst is regenerated to get rid of coke that collects on the catalyst during the process.
Spent catalyst flows through the catalyst stripper to the regenerator, where most of the
coke deposits burn off at the bottom where preheated air and spent catalyst are mixed.
Fresh catalyst is added and worn-out catalyst removed to optimize the cracking
process.

Catalytic Hydrotreating
Catalytic hydrotreating is a hydrogenation process used to remove about 90% of
contaminants such as nitrogen, sulfur, oxygen, and metals from liquid petroleum
fractions. These contaminants, if not removed from the petroleum fractions as they
travel through the refinery processing units, can have detrimental effects on the
equipment, the catalysts, and the quality of the finished product. Typically, hydrotreating
is done prior to processes such as catalytic reforming so that the catalyst is not
contaminated by untreated feedstock. Hydrotreating is also used prior to catalytic
cracking to reduce sulfur and improve product yields, and to upgrade middle-distillate
petroleum fractions into finished kerosene, diesel fuel, and heating fuel oils. In addition,
hydrotreating converts olefins and aromatics to saturated compounds.

Catalytic Hydrodesulfurization Process
Hydrotreating for sulfur removal is called hydrodesulfurization. In a typical catalytic
hydro-desulfurization unit, the feedstock is deaerated and mixed with hydrogen,
preheated in a fired heater (600-800 degrees F) and then charged under pressure (up
to 1,000 psi) through a fixed-bed catalytic reactor. In the reactor, the sulfur and nitrogen
compounds in the feedstock are converted into H2S and NH3. The reaction products
leave the reactor and after cooling to a low temperature enter a liquid/gas separator.
The hydrogen-rich gas from the high-pressure separation is recycled to combine with
the feedstock, and the low pressure gas stream rich in H2S is sent to a gas treating unit
where H2S is removed. The clean gas is then suitable as fuel for the refinery furnaces.
The liquid stream is the product from hydrotreating and is normally sent to a stripping
column for removal of H2S and other undesirable components. In cases where steam is
used for stripping, the product is sent to a vacuum drier for removal of water.
Hydrodesulfurized products are blended or used as catalytic reforming feedstock.

Other Hydrotreating Processes
Hydrotreating processes differ depending upon the feedstocks available and catalysts
used, it can be used to improve the burning characteristics of distillates such as
kerosene. Hydrotreatment of a kerosene fraction can convert aromatics into
naphthenes, which are cleaner-burning compounds. Hydrotreating also can be
employed to improve the quality of pyrolysis gasoline (pygas), a by-product from the
manufacture of ethylene. Traditionally, the outlet for pygas has been motor gasoline
blending, a suitable route in view of its high octane number. However, only small
portions can be blended untreated owing to the unacceptable odor, color, and gum-
forming tendencies of this material.

FCC Catalysts
According to one estimate (Avidan 1992), that the capacity of the worldwide FCC
catalyst production in 1990 was about 1,100 ton/day or 400,00 ton/year. Assuming that
90% of the production capacity is needed to replace spent catalyst from the FCC units,
the total amount of spent FCC generated in the world is then about 360,000 t/y. Rao
(1993) estimated that there were about 336 FCC units operating around the world, each
processing 3,300 t/d of feed and requiring 2-3/t/d of freshcatalyst make up.

Management of spent catalysts

On-going environmental concerns have had major impacts on the refinery industry in
general. First there was the response to phase out the lead in gasoline by most
developed countries, following the discovery of health hazard it poses on urban, young
populations through lead accumulation in their blood. Then there was the discussion in
some countries of a possible ban of an additive called MTBE (methyl tertiary butyl ether)
which was found to contaminate groundwater through leaky underground storage tanks.
Current regulations on the emission of sulfur oxides (SOx) from vehicles have pushed
fuel sulfur contents to very low levels (~10 ppm in some jurisdictions). Refineries are
now facing the formidable challenge of lowering the sulfur content in their products at a
time when the good quality low-sulfur crude is becoming scarce. Technically, removing
sulfur from the products during the refining stage is possible; however, the economic
impact could be substantial in terms of major process modifications needed. Another
major impact on the refinery will be the expected increase in the need for catalyst
replacement and disposal of the spent catalysts. This is because proportionally, more
sulfur will report to the catalysts that will hasten their service life through sulfur
deposition. Safe disposal of these spent catalysts is a significant environmental problem
as landfill disposal is no longer generally accepted as the best practice. In many cases,
the spent catalysts have been classified as hazardous waste material and are subject to
stringent disposal guidelines. Most major refinery companies have set up special
disposal practices and only allow authorized waste collectors and processors to dispose
the catalyst waste. Metals including nickel, iron, and vanadium are often found in crude
oils in small quantities and are removed during the refining process. Trace amounts of
arsenic, vanadium, and nickel can accumulate in the pore structure of catalysts and
poison these processing catalysts.
Large quantities of catalysts are used in the refining industry for operation and
upgrading of various petroleum streams and residues. The catalysts deactivate with
time and the spent catalysts are usually discarded as solid wastes. The quantity of
spent catalysts discharged from different processing units depends largely on the
amount of fresh catalysts used, their life and the deposits formed on them during use in
the reactors. In most refineries, a major portion of the spent catalyst wastes come from
the hydroprocessing units. This is because the catalysts used in these processes
deactivate rapidly by coke and metal (V and Ni) deposits, and have a short life due to
fouling of the active catalytic centers by these deposits. Furthermore, technology for
regeneration and reactivation of the catalysts deactivated by metal fouling is not
available to the refiners. The volume of spent hydroprocessing catalysts discarded as
solid wastes has increased significantly in recent years due to the following reasons:
- rapid growth in the distillates hydro processing capacity to meet the increasing
demand for ultra low-sulfur transportation fuels
- a steady increase in the processing of heavier feed stocks containing higher sulfur,
nitrogen and metal (V&Ni) contents, and
- rapid deactivation and unavailability of a reactivation process for reside
hydroprocessing catalysts.

Recovery of metals
In recent years, increasing emphasis has been placed on the development of processes
for recycling and recovering of the waste catalyst metals, as much as possible. In
literature there are many applied researches for spent metals recovery, particularly for
catalyst that contain high concentrations of valuable metals (Mo, Ni, V and Al2O3)
However, fluctuations in the market prices of the recovered metals and their purity,
together with the high costs of shipping significantly influence the economics of the
metal reclamation process making it less attractive for spent catalysts that contain low
metals concentrations. As the environmental pressure increases, and as the cost of
catalyst storage and disposal continues to rise, the utilization of spent refinery catalysts
for metal recovery is becoming a viable pollution. Therefore, the refiners are ready to
supply spent hydroprocessing catalysts free of charge in order to reduce their costs for
storage and disposal. If the market value of the recovered materials is high enough,
then it will offset, the processing cost yielding, a net profit to the reclaimer companies.
Since J anuary 2009, the Polish market, as well as other European Union countries,
force the EU regulation, which allows to sell of fuel with a sulfur content not exceeding
10 ppm (10 mg per kg). This regulation reduces permitted sulfur content of fuels five
times. Such tightened requirements allow to produce only low sulfur fuel, however it
requires complex technological operations, because the major oil contamination are the
organic compounds of sulfur. Their content varies depending on the origin of the
material. Growing demand for high purity, free of sulfur and aromatic hydrocarbons
motor gasoline, was the reason why a lot of technological operations restricting the
content of these compounds had to be applied. Two basic operations in today's
refineries supplying gasoline components to compose gasoline, are catalytic cracking
and reforming. The main objective of the catalytic cracking is to split hydrocarbons of
high molecular weight into fragments of a suitable volatility, enabling their use as fuels.
Products obtained from this process does not hav sufficiently high octane number,
required high compression for engines and it is necessary to subject them to catalytic
reforming, high-temperature heating of light petroleum fractions or cracking under
pressure. However, such systems, used for crude oil, are a constant source of spent
catalysts, which are formed by aging and deposition of inorganic contaminants,
petroleum coke and carbon-containing compounds and sulfur on the catalyst surface.
Spent catalysts in the refinery processes are classified as hazardous waste: they are
flammable, explosive, toxic, corrosive, they also emit toxic gases in contact with the
environment.
Reforming and hydrogenation catalysts can be processed by dissolving a ceramic base
in sodium hydroxide or sulfuric acid. Before leaching, excess amount of coal and
hydrocarbons is burned. Recovery of platinum from this type of catalysts is complicated
and there may be a need to repeat the particular stages of the process to achieve the
required purity. Their number and sequence also depend on the type of discharged
pollutants. Many methods of metal recovery require the application of cyanide, chlorine,
hydrochloric acid and nitric acid. These reagents are used again in these processes, but
ultimately they require oxidation or neutralization with caustic soda and lime. Sludge
from wastewater treatment is analyzed for the content of recycled metals. Disposal of
spent catalysts is a challenge because of their form (fine-granulation and high porosity),
complex chemical composition and content of hazardous substances: compounds of
transition metals, hydrocarbons and sulfur phase. Technologies of roasting processes,
hydrometallurgical and pyrometallurgical processes to separate the various metals are
mainly used for this purpose. The recovery of metals such as Mo, Ni, Co, V from spent
catalysts of petroleum is possible, however, for economics of this process influences of
prices metals, the content of this metal, transport costs and the purity of the recovered
metal. The demand for petrochemical catalysts, FCC and RFCC on the basis of Ni and
V is increasing and is projected to increase in global demand for them is estimated for
6.3% per year.

World demand for rare earth elements was estimated at 136,000 tons per year, with
global production around 133,600 tons in 2010. The difference was covered by
previously mined above ground stocks. World demand is projected to rise to at least
160,000 tons annually by 2016 according to the Industrial Minerals Company of
Australia. Some mine capacity at Mt. Weld Australia has come on-stream in 2012, but
far below the projected 11,000 metric tons of capacity. Other new mining projects could
easily take as long as 5-10 years to reach production. In the long run, however, the U.S.
Geological Survey expects that global reserves and undiscovered resources are large
enough to meet demand. Many types of catalysts contain valuable platinum group
metals (PGM), rare earth elements (REE) that can be lost if treated pyrometallurgically,
base- and other metals (e. g. Ni, Co, Mo, Al, V, etc.). These can be technologically
treated and catalyst-recycling installations already exist due to the high economic value
of these metals and other elements in the catalysts. However, recycling rates can be
relatively low in countries with an inadequate collection infrastructure, or due to
economic reasons for viably running a catalyst recycling plant.

Platinum and Palladium
Platinum and palladium have long been used as the reforming and hydrogenation
catalysts in petroleum industries, respectively. The demand of the petroleum catalysts is
expected to remain strong as many refineries and petrochemicals plants are under
construction and more to be constructed in the near future. The petroleum catalysts
containing platinum or palladium are discarded when its catalytic function deteriorates.
In the catalysts, small amounts of platinum or palladium are contained in large volume
of support materials, typically alumina. Platinum and palladium in spent petroleum
catalysts can be recovered through various hydrometallurgial or pyrometallurgical
routes. The hydrometallurgical treatment is believed to be pertinent to smaller scale
plants while the pyrometallurgical treatment is more suitable for larger plants. Basically
two process options are mostly available for the recovery of platinum and palladium
using the hydrometallurgical methods. In the first method, platinum or palladium is
extracted directly from catalyst substrate using leachants. In this method, the catalyst is
leached in aqua regia or in hydrochloric acid with oxidants such as nitric acid, sodium
chlorate, sodium hypochlorite and chlorine gas.
Meng and Han modified the conventional leaching method using halogen salts as an
oxidant in autoclave. Nevertheless, in this method also the problem such as the loss of
platinum and palladium due to the leachate entrapped in the micropores of the catalyst
substrate could not be avoided. The second method is based on total dissolution of
alumina substrate thereby concentrating insoluble or sparingly soluble platinum and
palladium into the residue. This method has the advantages such as recovery of
aluminum sulfate as a byproduct and lesser consumption of the toxic leachant than in
the first method.

Molybdenum
Molybdenum is the most important metal in human life. In recent years, the world
molybdenum demand has been increasing. The world's largest producers of
molybdenum materials are the United States, Canada, Chile, Russia, and China.
Though molybdenum is found in minerals like wulfenite (PbMoO4) and powellite
(CaMoO4), the main commercial source of molybdenum is molybdenite (MoS2).
Molybdenum is mined as a principal ore and is also recovered as a byproduct of copper
and tungsten mining. Processing of molybdenum from natural resources yields
molybdenite concentrate, which is the first commercial product. To generate MoS2 from
the ore, physical treatments like crushing, pulping, grinding and flotation are the
essential steps. The primary molybdnum ores will give as final product 90-95% MoS2,
whereas the complex ores of copper molybdenum will give 90% MoS2 as final product.

Vanadium
Vanadium is an important by-product used, almost exclusively, in ferrous and non-
ferrous alloys due to its physical properties such as high tensile strength, hardness, and
fatigue resistance. The global supply of vanadium originates from primary sources such
as ore feedstock, concentrates, metallurgical slags, and petroleum residues. Other
vanadium reserves include potential recovery from oil-bearing sands, shale gas,
phosphate rocks, and crude oils.



Technologies for recovery of metals
Recycling also plays an important role in the production of molybdenum and vanadium
as individual metals or as the corresponding ferroalloys. A possible feedstock for this
purpose are catalysts from the petroleum industry for hydro-treatment (HDT), which
among others eliminate N, S and O and even metals (Ni, V, etc.) from the treated
hydrocarbons. The spent catalysts contain in general about 210 % molybdenum, 012
% vanadium, 0.5 4 % cobalt, 0.510 % nickel, up to 10 % sulphur and 10 % carbon,
and are therefore an interesting recycling resource for molybdenum and other metals.
An alternative for the recycling of these catalysts is pyrometallurgical treatment for the
recovery of ferroalloys. Otherwise, many hydrometallurgical processes are proposed for
separating the individual value metals and extracting them in a pure state. All these
procedures follow the same concept. First, the spent catalysts are roasted to remove
carbon, sulphur and volatile species or are alternatively pre-processed with acetone.
The remaining material is then leached to dissolve the value metals. This uses different
solvents with pH-values ranging from acid to alkaline, depending on the roasting
conditions. For instance, roasting with soda converts molybdenum and vanadium into
water-soluble compounds. Finally, the metals are separated mostly by solvent
extraction, but selective precipitation and ion exchange can also be used as well as
absorption/desorption for purification of the solution. There is significant less activity for
the recycling of niobium and tantalum. Today, the recycling metallurgy of these metals,
their reclamation from tin slag and process residues is well-established.

The technologies used commercially for total or partial reclamation of components from
spent catalysts can be divided into two categories: hydrometallurgical and
pyrometallurgical. In some instances, a combination of the two technologies is also
used. The metals are reclaimed for sale or use, whereas the remaining metals are sold,
reused, or disposed of as nonhazardous waste.

Hydrometallurgical Processes
This process mainly involves leaching, washing and drying processes. Organic agents
(e.g., oxalic acid, citric acid, lactic acid, salicylaldehyde, aminophenol) and inorganic
agents (e.g., sulphuric acid, sodium hydroxide) or a combination of both can be used as
leaching agents (Furimsky, 1996). In some processes, the spent catalyst is roasted prior
to leaching in order to remove carbon and sulphur. The CRI-MET process is a
hydrometallurgical reclamation process used for the spent hydrotreating catalyst. When
processing Ni-Mo or Co-Mo spent catalysts by this method, the solution obtained from
the first leaching with weak caustic contains molybdenum, vanadium, and some
impurities. The extract is submitted to purification and separation, resulting in
concentrates of the corresponding metals. Molybdenum and vanadium can be
separated by precipitation or over an ion exchange resin.

Pyrometallurgical Processes
This approach mainly involves calcining, sulfiding, nitrogen stripping, and chlorinating
processes. The pyrometallurgical process typically consists of the following steps:
1. Feed preparation, blending, agglomeration and palletizing;
2. Roasting for carbon and sulphur elimination;
3. Smelting in an electric furnace, resulting in a metal concentrate (i.e., matte) and slag;
4. Metal extraction and casting, or further metal refining.
The final products from such a process are typically stainless steel alloys, purified metal
concentrates, electrolytic nickel and cobalt, MoO3, V2O5, alumina slag, and/or some
precious metals.

Hydro/Pyrometallurgical Processes
Some processes combine the hydrometallurgical method with a pyrometallurgical
method. For example, in the Eurecat process, the solid obtained after the first leaching
step is submitted to a pyrometallurgical treatment, in which the solid is fused in an arc
furnace at over 1500 C.

Business Opportunity for EIL

Construction continues mainly on new HDT units of heavy feedstock and distillation
cuts to meet product quality adapted to future environmental regulations.
FCC and Hydrocracking capacity will increase significantly to satisfy fuel market
needs.
Refineries will continue to consolidate operations, rationalize capacity and increase
performance of existing facilities.
Global refining catalyst market will rise to $2.65 billion (3.9% per year) by 2005.
Spending on HDT, FCC, HCK, ISOM and other catalyst market will grow by about $34,
$32, $11, $2.5 and $2 million per year, respectively.
Higher catalyst spending growth is expected for North America region ($27.5 million
per year).

The composition detail of spent catalysts from different sources is given below:
Catalyst Chemical Composition by wt Recovery as per
literature
Methanation Catalyst NiO 18-20; Al
2
O
3
- Rest 57 - 96% Ni; 10% Al
based on process used
Reforming Catalyst NiO 30-32; Al
2
O
3
Rest
(promoted with TiO
2
, Fe
2
O
3
etc)
57 - 96% Ni; 10% Al
based on process used
HDS Catalyst CoO 1-2; MoO 7-13; Rest
Alumina
80 - 90% Co; 90 - 95%
Mo
The global market for refining catalysts was $3.1 billion in 2011roughly a quarter of
the $12.5-billion process catalyst industry, according to IHS Chemical. The largest
segment in terms of value is Hydro-processing catalyst (HPC), while the largest-volume
products are the zeolite-based FCC catalysts that convert heavy petroleum fractions
into lighter, more-valuable components. Other major refinery catalyst market sectors
include hydrocracking and reforming catalysts, IHS says. Looking ahead, changes in
crude oil composition, desired product slates, and stricter emissions limitsparticularly
in high-growth emerging marketsfavor increased catalyst use globally, producers say.
Refiners are using more FCC resid catalysts to upgrade the bottom of the barrel and
increase olefins output, says The Catalyst Group (Spring House, PA). Demand for HPC
catalysts is also growing as refiners increase hydrotreating capacity to manage the
increasing sulfur content of crude and meet tighter sulfur regulations worldwide. The
Catalyst Group expects refinery catalyst demand to grow 3.7%/year through 2015.
Motto says refineries in Asia, India, and certain parts of the Mideast are looking for FCC
catalysts that help maximize propylene yields, Motto says. Albemarles FCC volumes
were up 14% YOY in 2012. Company sales of refinery catalysts in emerging regions
increased 29% in 2012. Also, emerging-region growth was cited as the largest
contributor to a 12% increase YOY in FCC sales volumes.
The price of the rare earth metals oscillated between $650/ounce and $750/ounce amid
a wider selloff of precious metals driven by concerns about the U.S. scaling back
stimulus and a struggling global economy. Palladium has already outperformed other
precious metals so far this year with gold down 20%, silver down 28% and platinum
down 8%, palladium is the only bright spot appreciating by 3% on a year-to-date basis.
Palladium has successfully detached itself from the other precious metals and given
recent events we think this divergence will continue. Norilsk, the single largest producer
of palladium, reiterated their bullish view of the PGM market. We see a palladium
deficit of 1 million ounces for 2013 and a platinum deficit of 500,000 ounces. They
further suggested that palladium stockpiles at Russian state repository Gokhran are
probably exhausted, and not affecting the market anymore. Students of the market will
know that the Russians had a large store of palladium that they were selling on to the
market. The limited imports/exports of palladium through Switzerland in August seem to
confirm Norilsks statements. For perspective a 1,00,000 ounces deficit in the market
represents 15% of annual mine supply of the metal. A platinum ETF launched earlier in
the year has set investor demand on fire in South Africa, and hopes are high that a
palladium version would achieve the same result. The South African platinum ETF has
seen strong and steady inflows since inception with holdings now around 658k ounces.
This accounts for about 30% of global platinum ETF holdings after only four and a half
months of being active. Given investor interest in palladium this year, it seems
reasonable to expect that a similar structure for palladium will also be well-received.
Expectations are that this ETF will come to market by the end of 2013. With the
palladium holdings of all ETFs totaling 2.2 million ounces if this fund were to
accumulate palladium at the same rate as the platinum ETF, we would see the
palladium market move further into deficit. Further bullish positioning can be seen in the
futures market, but not where you would expect. Palladium has now overtaken silver in
the #1 position for the first time as the largest short position relative to world production.