Clean Diesel Technologies (CDTI) Surged 130% Yesterday- More To Come?

| October 31, 2014 | 0 Comments

PalladiumClean Diesel Technologies (CDTI) caught some serious attention from investors yesterday. The micro-cap emission control company more than doubled in price when they announced a potential breakthrough in catalytic converter design.

According to their press release, CDTI received two patents from the US Patent and Trademark Office for its previously confidential Spinel technology.

Believe it or not, CDTI believes they can eliminate the use of platinum and palladium (PGMs) in catalytic converters with Spinel! 

What’s the big deal about that?

In case you’re unaware, catalytic converters are required on all motor vehicles in nearly every country. The essential device sits in the exhaust system, converting toxic pollutants into less harmful emissions before they leave the car.

But the fact catalytic converters require costly rare metals to function properly makes them quite expensive.

According to Chris Harris, CDTI CEO, original equipment manufacturers (OEMs) spend approximately $6 billion annually on PGMs and rare earth metals to put into catalytic converters.

But listen to this… 

CDTI’s Spinel technology uses a “family of proprietary materials using various base metals that replace costly PGMs and rare earth metals in coatings on standard catalytic converters.”

Folks, that’s a remarkable claim!

If true, it’s a game changer, not only for CDTI, but for the global platinum and palladium (PGM) markets.

As it sits now, approximately 50% of global PGM production goes into the automobile industry. If a large portion of global demand disappears, you can bet PGM prices will fall precipitously.

To be clear, CDTI’s new catalytic converter is still in testing…

What’s more, the company didn’t provide a date as to when test results will be made public.

But if Spinel proves to be the breakthrough the company says it is… watch out. CDTI will likely see massive revenues flow into their coffers as OEMs gobble up their cost effective converters.

Now, before you rush out a buy CDTI, consider this…

There’s no telling how long it will take CDTI to get their product into the hands of OEMs.

Realistically, it could be quite some time before the company sees a penny of revenue from Spinel. And while CDTI had sales of $12.5 million from other products in Q2 2014, they turned a hefty loss and have significant amounts of debt.

As a result, it’s not a great idea to buy CDTI after it has jumped 130%. But if you keep CDTI on your watch list, you’ll likely get a chance to purchase shares at a discount soon!

Until Next Time,

Justin Bennett

Tags: , , ,

Category: Commodity Trading, Palladium, Platinum

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.