[wheelguy]

The FM has proposed a duty cut to 7.5% for certain industrial purposes , while the existing basic duty on palladium is 10% with a countervailing duty (CVD) of 12% and a special CVD of 4%.

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KOLKATA: The cut in customs duty on palladium is likely to benefit auto companies as it is widely used in automobiles exhaust systems as catalytic converters. Nearly 80% of the metal finds use in the auto sector where it helps reduce harmful emissions in engines that use petroleum.

The FM has proposed a duty cut to 7.5% for certain industrial purposes , while the existing basic duty on palladium is 10% with a countervailing duty (CVD) of 12% and a special CVD of 4%. The move is expected to give a fillip to government efforts to encourage cleaner air.

In particular, palladium, a rare metal, is used in catalytic converters to neutralize toxic pollutants by turning them into water vapour and carbon dioxide. With regulatory authorities in various countries tightening emission norms on combustion engine vehicles, regulation on emission standards have emerged as a key driver in auto industry sales.

This has led to a growing demand for palladium has in the last few years. Its use in the auto sector has seen a growing trend along with lithium and cobalt used to make batteries for EVs.

"The move is expected to assist petrol car makres since it is used in catalytic converteres in achieving cleaner emissions. This will help auto manufacturers save on costs and improve their profitability," Ashwin Patil, senior research analyst at LKP SEcurities who tracks the automotive sector said.

Globally, EVs constitute only 4% of the car market. With the roadmap for a switch to EV market remaining unclear, demand for petrol cars continue to drive growth in the automotive market. While China’s crackdown on vehicular pollution has led to hike in international demand for palladium, a recent

Bloomberg report said in Europe, consumers bought fewer diesel cars, which mostly use platinum, and instead chose gasoline-powered vehicles, which use palladium. The metal is mainly mined in South Africa and Russia and extracted as a by-product of platinum and nickel mining.

One of the four precious metals, palladium is one of the most expensive at around $1,400 per ounce. Last year it had been trading above gold for most part of the year. With supply falling short of the spike in demand, analysts believe palladium is likely to maintain strong price trends this year too.

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[Jeroen]

I doubt very much we as the consumer will notice anything, price wise.

Not sure about India, so I stick to European price. The Indian will roughly follow the same trend/ratio’s.

In Europe a typical catalytic convertor will retail at a couple of hundred Euro’s. A nice Ford Fiesta cost say Euro 15.000. Its aftermarket convertor cost Euro 225.

So the catalytic convertor is about 1,5% of the total price. So we are talking about a 2,5% price cut on something that is 1,5% of the total. So we are talking about 0,000375%-point extra cost reduction of the Fiesta.!

The manufacturer is of course paying even less for the convertor, than the prices we can see in the aftermarket, so the cost reduction is going to be even less.

Depending on car, make, price, price of the catalytic convertor it might vary, but the message is clear. This is not going to move the needle for the consumer at all. More likely some more Euro’s / INRs will remain in the pockets of the manufacturer.


Jeroen

[Sutripta]

Originally Posted by wheelguy

The FM has proposed a duty cut to 7.5% for certain industrial purposes , while the existing basic duty on palladium is 10% with a countervailing duty (CVD) of 12% and a special CVD of 4%.

Strange that a day after the budget ET (well, one of its offsprings) has to hunt about for spacefillers.

A customs duty cut (when generally these are on the rise) is welcome, and I suppose warrants some tomtoming,

The move is expected to give a fillip to government efforts to encourage cleaner air.

means that the current cats aren't doing a proper job because of dearth of Palladium, and a slight increase will make a perceptible difference in their performance, but this narrative is highly ludicrous!

Regards
Sutripta