PALLADIUM (Reuters) - Palladium prices rose to an all-time high on Thursday on worries over tight supplies of the metal used as a catalyst in the auto industry due to labor problems in South African mines, boosting its lead over gold.
Palladium hit a record high of $ 1621.55 an ounce on Thursday before giving up some early gains on Friday to settle at $ 1608.01 an ounce.
"In terms of the fundamentals of platinum and palladium in particular, there are ongoing wage negotiations in South Africa," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
"Our main issue is not to expect a major supply disruption, but since the palladium market is already in short supply, any additional losses in production are likely to lead to more market tightness," he said.
In contrast, gold trimmed gains after a Bloomberg report said US President Donald Trump administration officials were considering offering a limited trade deal to China, which could delay or cancel some fees in return for assurances of intellectual property rights and agricultural purchases.
Spot gold rose 0.1% to $ 1498.66 an ounce, while US gold futures rose 0.3% to settle at $ 1507.40 an ounce.
Gold continued to decline in spot trading on Friday and fell by 0.1% to reach $ 1496.76 an ounce at 5: 21 UTC.
Among other precious metals, silver fell 0.02% to $ 18.07 an ounce, while platinum rose 0.5% to $ 949 an ounce.
| Palladium is mainly used in automotive industries (Reuters) |
Palladium uses
Palladium is mainly used in the automotive industry to purify it from environmental pollutants. The price of the precious metal has been boosted by insufficient global supply to meet demand, especially as consumers tend to gasoline-powered cars instead of diesel-powered ones.
This rare metal is also used in electronics, dentistry, hydrogen purification, jewelry and catalytic converters.
Palladium also found support from research by automakers on reducing emissions and reducing carbon dioxide emissions.
Palladium has risen about 28% since the beginning of the year, and has seen an increase of 22% in 2016, 56% in 2017, and about 16% in 2018.
The price difference between palladium - the metal that took the throne from gold - and his brother platinum was no bigger than it has been since 2001.
While automotive industries use platinum and palladium primarily for the manufacture of catalytic converters, platinum is more commonly used in diesel cars.
Experts believe that the rise in the price of palladium goes beyond the principle of supply and demand by companies to other factors related to the likely existence of market manipulation by the main producers to push prices up.
Adult producers
Russia, South Africa, Canada, the United States and Zimbabwe are the world's top five producers of palladium.
Russia produced 81 metric tons of palladium in 2017, while South Africa produced 78 tons, Canada 19 tons, America 13 tons, and Zimbabwe 12 tons, according to the same source.
The Russian company "Norilsk Nickel" is the largest producer of palladium in the world, accounting for 39% of the global production of this rare metal.