THE INELUCTABLE RISE OF PALLADIUM PRICES🌟
POSTED BY ALICE
Since the break-up of the Volkswagen case, the demand for palladium, a metal used in the manufacture of catalytic converters for gasoline-powered cars, is strong. Used by the automotive industry to manufacture catalytic converters for gasoline engines, the metal is close to its highest historic level. In the metal markets, which have been battered by the escalating Sino-US trade dispute, palladium is on its own.
Since mid-August, the price of the silver-gray metal has risen by 28%. At $ 1,095 an ounce last Friday, palladium is, for the second time this year, close to its historical record of 2001.
The first time was in January. At this price, palladium is also almost as expensive as gold, whose ounce was trading around $ 1,185 on the eve of the weekend.
Used in the manufacture of catalytic converters for gasoline engines, palladium is a victim of its success. Since the break-up of the Volkswagen case, demand has been particularly strong and the supply of metal more limited. The scandal of “Dieselgate” triggered a reversal of the trend in Europe of whom palladium has greatly benefited.
Difficult forecast
While analysts at Commerzbank say an increase “probably fueled mainly by speculation”, those of UniCredit quote “a return of concerns about the offer” after US sanctions against Russia, the largest producer of palladium.
For Morgan Stanley, the “persistent deficit” of supply of the palladium market makes it a “structurally positive story”, and perfectly “intact”. Analysts at the US bank have placed the precious metal at the top of their commodity thermometer which includes eighteen metals and ores. Citigroup is equally optimistic and sees the price of an ounce climb to $ 1,200 by the second quarter of 2019.
Platinum / Palladium for 2 years
Rapid exhaustion of stocks
At this rate, global stocks of palladium are eroding rapidly. “The level of mining production cannot be easily met, demand will have to adjust,” said Morgan Stanley. The carmakers could look for a substitute and turn towards the platinum whose price is today much lower: to 820 dollars an ounce, it has not been as cheap compared to the palladium for 17 years. But it will take time – at least two to three years so that the techniques adapt…
