Palladium rockets to 13-year high

The price of palladium has surged to its highest level since February 2001.

The price of palladium surged above $905 an ounce this week, its highest level since February 2001. It has gained 25% since the start of the year, and 468% since late 2008, when it hit a low of $187. Palladium is used mainly in catalytic converters in petrol-powered cars, and is also used for jewellery.

What the commentators said

That has shifted the spotlight on to supply from Russia, comprising about 35% ofthe market. Investors have been concerned that Russian output couldbe hit by sanctions.

Meanwhile, demand looks set to grow steadily for years. Both the US and China are fast-growing car markets for petrol-powered vehicles. Low car penetration and increasingly stringent emission standards mean that China will account for almost half the growth in palladium demand between 2013 and 2020, reckoned Deutsche Bank.

Nonetheless, the rally looks overdonein the short term, said Capital Economics. For one thing, both theWest and Russia would suffer if the market was disrupted.Western sanctions would deprive carmakers of a key raw material, while Russia's Norilsk Nickel, the world's biggest palladium producer, would need to find new markets.

Moreover, "there are growing sources of secondary supply", such as recycled autocatalysts. Stockpiles also appear reasonably healthy.

Recommended

Commodity prices are taking a breather
Commodities

Commodity prices are taking a breather

Commodity prices have fallen back after spiking early in the year. Iron ore is down 36% from its March peak, while copper has lost 20% since 1 January…
21 Sep 2022
How to invest in silver, the precious metal set to shine again
Silver and other precious metals

How to invest in silver, the precious metal set to shine again

The price of silver – both a precious and industrial metal – has plunged in recent months. Yet it still has huge potential, says David J Stevenson. He…
15 Sep 2022
The best way to invest in natural gas
Gas

The best way to invest in natural gas

David Stevenson looks at the best way to invest in natural gas as the demand for the commodity surges.
14 Sep 2022
Silver – the cheap precious metal set for a multi-week rally
Silver and other precious metals

Silver – the cheap precious metal set for a multi-week rally

Silver is full of potential – but it is a risky investment. Right now, however, it’s cheap and the outlook is positive. Dominic Frisby explains why.
14 Sep 2022

Most Popular

The best British tech stocks from a thriving sector
Share tips

The best British tech stocks from a thriving sector

Move over, Silicon Valley. Over the past two decades the UK has become one of the main global hubs for tech start-ups. Matthew Partridge explains why,…
29 Sep 2022
Share tips of the week – 30 September
Share tips

Share tips of the week – 30 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
30 Sep 2022
Why everyone is over-reacting to the mini-Budget
Budget

Why everyone is over-reacting to the mini-Budget

Most analyses of the chancellor’s mini-Budget speech have failed to grasp its purpose and significance, says Max King
29 Sep 2022