Advertisement

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.

Advertisement - Article continues below

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.

Advertisement
Advertisement

Recommended

Commodities look cheap
Commodities

Commodities look cheap

Gold may be on a bull run, but industrial commodities, including copper, zinc and aluminium, remain cheap.
17 Jan 2020
The best bet in the base metals rally
Industrial metals

The best bet in the base metals rally

The prices of key industrial metals have been enjoying a spectacular rally.
3 Jul 2020
Diamond glut won’t be forever
Silver and other precious metals

Diamond glut won’t be forever

Diamond stocks have been piling up after suppliers refused to cut prices. But demand could soon pick up.
19 Jun 2020
This looks like the biggest opportunity in today’s markets
Commodities

This looks like the biggest opportunity in today’s markets

With low interest rates and constant money-printing, most assets have become expensive. But one major asset class hasn’t. John Stepek explains why com…
2 Jun 2020

Most Popular

An economics lesson from my barber
Inflation

An economics lesson from my barber

On reopening his shop after lockdown, Dominic Frisby’s barber doubled his prices. It’s all part of the post-Covid inflation process – and we’re going …
8 Jul 2020
Three ideas for Lloyds Bank's new boss
UK stockmarkets

Three ideas for Lloyds Bank's new boss

The Black Horse needs whipping into shape. A change at the top provides a great opportunity, says Matthew Lynn.
12 Jul 2020
What gold, bonds and tech stocks have in common
Stockmarkets

What gold, bonds and tech stocks have in common

"Risk off" or "safe haven" assets such as gold and government bonds have been doing well lately. But so have riskier tech stocks. That seems to defy c…
10 Jul 2020