Palladium’s price jumped once again over the weekend, following a steady climb over the last while.
During the past two weeks alone, the price of palladium has jumped 25%. The precious metal is now priced at almost $2550 per ounce, making it more valuable than gold. It doesn’t look like the factors that have been pushing this metal’s price up will cease anytime soon.
Palladium is a strange metal as its uses are very diverse. It is used in catalytic converters, a component of cars’ exhaust systems that control emissions. The metal is thus used in most gas-powered and hybrid vehicles. This is the single largest use for palladium, as 80% of our use for the metal goes to these catalytic converters. These devices filter harmful gases like carbon dioxide and nitrogen dioxide into less harmful gases, like nitrogen and water vapor. Additionally, as a precious metal, it can often be found in jewelry and electronics.
At the moment, the demand for palladium exceeds the available supply. This has been the case for eight years in a row. The reason for this is that palladium is not a primary product of any kind of extraction. The metal is only a secondary product during the extraction of platinum and nickel, meaning miners have little ability to increase their output of palladium in response to increased demand. Furthermore, the metal is only found in a few places, primarily in South Africa, which produces 40% of it, and Russia.
As the world moves towards tighter regulations on vehicle emissions, demand for palladium will only increase. As palladium is not so easy a commodity to find, you can expect its cost to stay high.