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Palladium breaks historic price records

By Lawrence Gash

For the first time in its history spot palladium broke $2,000 an ounce

Palladium has started 2020 as it ended 2019, breaking price records and trending higher.

The metal essential in the manufacture of catalytic converters for auto vehicles gained 55 per cent in 2019 and is currently up more than 11.2 per cent on the year-to-date. For the first time in its history spot palladium broke $2,000 an ounce at the start of the month.

By mid-morning trading spot palladium has gained again to an all-time high of $2,378.64 an ounce, a daily gain of almost 4.75 per cent.

The reason for the metal’s continued rise is twofold and indeed, the oldest answer in the book: a shortage of supply coinciding with an increase in demand.

The global push to reduce emissions, including new government regulations mandating a 30 per cent reduction in all new cars manufactured in China, has increased the global demand.

At the same time, the major producers of palladium, such as South Africa and Russia, have been forced to contend with repeated production issues.

Consequently, investor sentiment generally holds that the metal will continue to rise in the coming months.

With such a shortage in supply mining firms are rushing to fill the gap. Palladium One’s LK project, for example, is hoping to find new deposits in Finland using 3D data mapping.

Ivanhoe Mine’s Platreef project in South Africa is fast tracking a new study for the feasibility of “smaller-scale” yet accelerated mine production.

Alongside palladium, the miner hopes to increase its production of rhodium. An alloy which improves the corrosion resistance of palladium and platinum and is used from glass fibre production to aircraft spark plugs. Rhodium has gained 32 per cent in the past month alone.

FURTHER READING: Palladium price forecast for 2020 and beyond

FURTHER READING: Palladium could break $2,000 for first time

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