Palladium eclipsed its sister metal platinum for the first time in 16 years last week. The crossover occurred at around $925 an ounce. This is due largely to trends in the car industry, the key source of demand for both metals. Platinum is used for catalytic converters in diesel engines, while palladium is the key element in converters for petrol engines. Record demand for the latter and dwindling enthusiasm for diesel amid growing worries over their environmental impact explains the latest price moves. The platinum market could see its first surplus in seven years in 2017; palladium is in deficit.
“The proportion of British exports by value that [are] components… or intermediate goods… [has] gone from 20% to 33% in the past 20 years as international supply chains became the norm. Today… we don’t just export to Europe, we export through Europe to the rest of the world. Thus we make the wings for the Airbus civil airliners that are assembled in France. When that business is taken away by Brexit there is unlikely to be much demand from our former colonies for the aircraft wings on their own. Most customers also want the bit in the middle that you sit in. That is why leaving the EU is so misconceived.”
Anthony Hilton, Evening Standard