Natural gas and platinum are both considered to be very crucial items in the global economy of the present-day world. Their prices can influence several industries, including manufacturing and energy in some cases. In this article, we will review the process of determining natural gas price and briefly discuss the factors affecting the platinum price.
Factors that determine the natural gas prices include:
The examination of natural gas prices involves understanding several factors that affect the prices in the market. Of these, the most important one would be the supply and demand equation.
The price of natural gas in countries such as India is arrived at in two steps. The first one is the Administered Pricing Mechanism (APM), under which the government decides on the prices, which applies mostly at the sectors of fertilizer and electricity. These prices should be as cheap as possible for them to be available to the general public as is possible.
The second is the market linked prices which depends on the current price of natural gas in the international market. This depends with the country from wh natural gas is imported. But, importing natural gas from countries which have been charging a high price for the same will necessarily entail a high price for the Indian consumers.
Government Intervention in Pricing
The natural gas price is highly regulated in India, and major decisions regarding it are taken by the government. Therefore, the government sets low prices for sectors that are considered vital to the economy, like the production of power and fertilizers by subsidizing them. This enables industries to operate without having to transfer some expensive energy costs to the consumer.
But if the cost structure entails market-linked prices, then it comes as no surprise that the price of natural gas varies for global factors. That is countries with greater deposits of natural gas, like the United States or Russia, may offer their supplies of the fuel at a cheaper price than countries that have little production and exploration of the energy source.
Why is platinum so popular?
Natural gas is a vital product in energy and industrial processes, while platinum is an essential raw material used in tangible goods such as jewelry and automobiles. The price of platinum is therefore determined by the increased demand for luxury products as well as a need for industrial items.
Currently, the largest amount of platinum is used in the jewelry industry, but its biggest application is in cars’ exhaust systems called catalytic converters for eradicating dangerous pollutants. This sector is also one of the most important places where demand for platinum determines its price.
Current Platinum Price and Trends
Unfortunately, today’s platinum price is often higher if you are looking for 24-carat platinum, popular in the markets and the trading. However, platinum used in jewelry is generally 22-carat or a little less in purity than the one used in the automobile industry. Thus, the price of platinum is not unique and varies according to the use that will be given to it.
Conclusion
Therefore, it can be summarized that there are a lot of factors, some of which include government policies about natural gas prices and the international markets for the same product, the industrial demand as well as the supply of the same product regarding the platinum price. Both commodities are relevant in various segments of the economy, and their tracking is relevant for investors and business entities.
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