PALLADIUM - Palladium is now the world's most precious metal, outperforming even the four major precious metals, and a severe shortage has pushed record prices, Bloomberg reported.
The price of palladium has doubled in a year or a little more, making it more expensive than gold, and palladium is involved in the manufacture of pollution control devices installed in cars and trucks.
In the latest trading on Wednesday, the price of palladium hit a record high at $ 1,824.50 an ounce, amid expectations that it will reach $ 2,000 or more next year, according to Reuters quoted experts.
1. What is palladium?
Glossy white material, one of six platinum minerals along with ruthenium, rhodium, osmium, and iridium.
About 85% of palladium is involved in the automobile exhaust industry, helping to convert toxic pollutants into less harmful carbon dioxide and water vapor.
It is also used in electronics, dentistry and jewelry. It is extracted mainly in Russia and South Africa, and is a by-product from the exploration of other metals such as platinum or nickel.
2- Why has it become more expensive?
The reason is that supply does not match the growing demand for palladium. The use of this metal is increasing as governments of countries, especially China, have begun to crack down on vehicle pollution and force car manufacturers to increase the amount of precious metal they use.
Palladium jumped 22% in 2016 and 56% in 2017, and about 16% last year, and has risen about 43% since the beginning of this year.
3. Why is supply tight?
Forecasts confirmed that the amount of palladium produced will fall below demand in 2019 for the eighth consecutive year, helping to raise prices to record levels.
Although some mysterious metals are still more expensive, palladium is selling at higher prices than gold most of the year.
|Palladium price has increased more than 40% since the beginning of this year (Reuters)|
4. Are speculators raising prices?
This is a bit true. Since August 2018, hedge funds have bet on high palladium prices.
Palladium for immediate delivery still sells for more than the nominal value of later deliveries, making manufacturers flock to supply.
5. Who are the winners and losers?
Although Russia's MMC Norilsk Nickel Palladium Mining and Smelting is the biggest producer, its high prices have been good news for South African platinum mining companies that extract it as a by-product of its main platinum metal, whose prices have hovered around 10-year lows.
On the other hand, carmakers are forced to pay a higher price for palladium but may compensate by raising the price of their products to consumers.
6. Does palladium usually fluctuate?
Yes, but that is not limited to palladium alone. Precious metals used by the automotive industry in small quantities have historically seen higher prices as demand exceeds supply.
7. Are car manufacturers looking for an alternative?
It is true that the rise in prices of palladium compared to platinum may motivate some carmakers to work to find an alternative to this metal. But it is uncertain when this transformation will take place. Research has been conducted on the use of platinum that has demonstrated the need for technological discoveries before the metal in the performance comparable to the current catalytic converters based on palladium.
8- What about electric cars?
It is known that electric cars do not work by burning fuel and do not have exhaust gases, nor do they use palladium.
However, most analysts believe that the electrification of the majority of the world's fleets still has many years to come.
The use of palladium in hybrid vehicles, meanwhile, is a source of growing demand for metal.
The most expensive metals and the latest prices
Rhodium: $ 5405
Palladium: $ 1824
Gold: $ 1492.85
Iridium: $ 1,460
Platinum: $ 918.4
Ruthenium: $ 246
Silver: $ 17.8