The price of palladium has hit a new record of $1,495 per ounce. Over the past six months, the price has risen by 70%. Last year it overtook the gold price, and it is also more highly valued than its sister metal, platinum. But this is "unlikely to last",
says Ross Strachan of Capital Economics. Palladium is used in catalytic converters for petrol vehicles, and in batteries for hybrid cars. Supply rose sharply in 2018, while the current slowdown in car sales will hit demand and "should cause prices to come off the boil".
The biggest risk is the transition to electric vehicles, which do not produce emissions or need converters, says John Gapper in the Financial Times. If governments incentivise consumers to go electric, the metal could slide.
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Viewpoint
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