Palladium prices hit record as car industry faces tougher rules
Demand for precious metal, used in catalysts, pushes gains for year to 33 per cent
Palladium prices rose to a record as expectations mounted of a supply squeeze driven by stricter emissions standards in the car industry.
The price of the precious metal, which is used in car catalysts, rose to $1,700 an ounce on Monday, pushing its gains for the year to 33 per cent and making it one of 2019’s best performing commodities.
Despite a slowdown in global car sales, demand for palladium has increased due to tightening emission standards in China that require more of the metal in car catalysts.
European consumers meanwhile are moving away from diesel to petrol cars, which predominantly use palladium catalysts.
The supply of palladium, which is mined in Russia and South Africa, is also expected not to increase dramatically this year.
“We struggle to see where the market might find material relief as demand continues to grow while supply remains constrained,” analysts at UBS said. “That said, there is potential for the market to overshoot and be vulnerable during periods of risk-off, especially in the context of trade tensions and slowing global growth.”