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Heraeus Precious Appraisal

  • Edition 25 - 13 August 2018

Cloud storage expansion positive for ruthenium demand

Hard disk drive (HDD) shipped memory capacity continues to increase despite an ongoing decline in overall unit sales. The world’s two largest HDD manufacturers, Western Digital and Seagate (together >75% of the market), reported growth in HDD storage capacity – exabytes (EB) – shipped in their FY2018 results for the year to the end of June. In capacity terms, shipments were up 24% and 29% respectively year-on-year, but combined unit deliveries decreased by an estimated 3%. Overall, global shipments fell by around 7% to fewer than 400 million drives in FY2018, the lowest 12-month total in over a decade.

EB growth is largely a result of greater shipments of high-capacity enterprise HDDs, used for cloud storage and data centres. Western Digital’s enterprise unit sales were 13% higher and its data centre EB shipments were up 60% from FY2017. As a result, the average capacity of all the HDDs shipped by the company in FY2018 jumped approximately 33% year-on-year to 2.4 terabytes (TB)/HDD, while Seagate’s average rose 29% to 2.2 TB/HDD. This suggests that the average number of disks (platters) per HDD has increased.

Higher capacities and more platters equal higher PGM content per drive. An increase in the average number of platters per HDD should be beneficial for demand of the PGMs used in the platters (platinum and ruthenium) and the accompanying read-write heads (iridium). Currently, HDD platters comprise just 2% of platinum usage but ~8% of ruthenium demand and therefore, as a reasonable proportion of demand in a deficit market, any meaningful increase in HDD consumption could have a significant impact on the ruthenium market, which is ~7 times smaller than that of platinum.

HDDs are a pillar of ruthenium demand. A high price might encourage thrifting, but current and next-generation technologies are likely to continue to use ruthenium. Requirements for cloud storage capacity are forecast to continue to expand along with growth in big data and personal data storage needs.

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