Slowing economic growth piles extra pressure on an auto industry still dealing with a semiconductor chip that began in 2020 and has forced companies to cut vehicle production, reducing platinum and palladium demand.
Growth is Expected at the End of the Year
At the start of 2022, palladium prices fell between 1,850 and $1,900. However, small increases in automotive production are expected to increase the price.
There are many good reasons to add precious metals to an investment portfolio. It is anticipated that the palladium supply will be scarce in the years ahead while the industrial demand will continue to grow. This scenario of tight supply and increased demand suggests strong prices.
Due to the COVID-19 pandemic and Russia-Ukraine War Influence, the global market for Palladium estimated at USD 4337.7 million in the year 2023, is projected to reach a revised size of USD 5665 million by 2028, growing at a CAGR of 4.6% during the forecast period 2023-2028.
Palladium-catalysed reactions are so valuable that, in 2010, their discoverers shared a Nobel prize. But despite its versatility, chemists are trying to move away from palladium. The metal is more expensive than gold, and molecules that contain palladium can also be extremely toxic to humans and wildlife.
Palladium is used in emission-reducing catalytic converters in gasoline engines, but the metal's price surge has driven automakers to replace it with platinum.
In 2021, approximately 200 metric tons of palladium was produced worldwide. Russia had been the leading global producer of palladium in recent years, but ranked second in 2021 next to South Africa. In 2021, South African palladium production was 80 metric tons, while Russian production amounted to 74 metric tons.
Relatively hard: Palladium is considered to be a softer metal, but it is still much harder and more durable than gold, which lends more protection against impact and a greater resistance to denting. Compared to gold's knoop hardness of 200, Palladium has a knoop hardness of 400.
Slowing economic growth piles extra pressure on an auto industry still dealing with a semiconductor chip that began in 2020 and has forced companies to cut vehicle production, reducing platinum and palladium demand.
While platinum will hold up better against impacts that might dent your ring, palladium is more resistant to scratches. For example, the prongs holding the center stone of a platinum engagement ring are less likely to break than those of a gold engagement ring.
Palladium Is in High Demand
Palladium is in high demand from various industries but there is a low supply. This makes the precious metal scarce, which is an attractive feature for an investment. There are many applications for palladium, making it one of the most sought after precious metals on the market.
Demand from this industry is a key driver for the precious metal that is a critical component in catalytic converters used to reduce gasoline engine emissions. The rising vehicle sales and tightening the emission regulations have led to a shortage of palladium for several years.
Historically, Palladium reached an all time high of 3440.76 in March of 2022. Palladium - data, forecasts, historical chart - was last updated on December of 2022.
As of November 1, 2022, palladium futures contracts to be settled in December 2023 were trading on U.S. markets at just over 1,853.8 U.S. dollars per troy ounce.
Galileo Mining Ltd (ASX:GAL) has received the highest palladium and platinum results to date from its 100%-owned Norseman project in Western Australia. Palladium and platinum drill results extend over nine kilometres of strike length along a well-defined geological trend.
Palladium was predominantly supplied globally by South Africa and Russia in 2021. However, South Africa is forecast to produce slightly less palladium than Russia in 2022, at 2.63 million ounces compared to Russia's forecast supply of 2.71 million ounces that year.
Palladium is often used in cell phone and laptop components, and it's also found in ceramic capacitors having multiple layers. Due to the metal's high level of conductivity, manufacturers commonly include it in the connector plates of a variety of electronic products.
The Gonneville deposit is estimated to contain 10 million ounces of palladium, platinum and gold – collectively called 3E (three elements) – plus more than 900,000 tonnes of base metals. Most significant was the platinum and palladium finding, which single-handedly inaugurated a new critical minerals industry.
Cadia Mine in New South Wales, was the largest gold-producing mine in Australia, producing approximately 764.9 thousand ounces of gold and an estimated 32.5 million metric tons per annum (mmtpa) of Run-of-Mine (ROM) in 2021.
Some people don't like the 'light' feel of palladium compared with platinum. Because it's a newcomer to the jewellery market, it's too soon to say whether palladium will keep its value so it's probably not the best metal to choose if you're looking to make a long-term investment.
Platinum and palladium are commonly used in catalytic converters to help reduce vehicle emissions, thus making them essential for the transition to a low-carbon economy.
Overview of costliest precious metals
Iridium is another PGM with a silver/white appearance. It is the second most dense material next to osmium and extremely rare ─ more iridium is found in meteorites than in the earth's crust.