Palladium prices reached a record level this year, exceeding 9% on the New York Stock Exchange, which is the best result this year among the major metals. And investors assume that the race has just begun, reports Bloomberg.
The market has a very positive fundamental perspective
According to the CPM group, almost 70% of demand Pallad comes from the automotive industry. Metal, which is used mainly in catalysts, has benefited from the transition of the automotive industry from diesel to gasoline engines. The change resulted in an increase in demand on the market, which currently has limited supply.
Experts point to this Chinese fight with "smog" this was another factor that contributed to the growing demand for palladium, as stricter pollution standards led car manufacturers to use more catalysts.
"The market has a very positive fundamental perspective (…) We are dealing with supply deficits that have taken place for eight yearsand it is expected to continue. Supply is certainly a problem on the mining front, as well as a reduction of existing stocks, "said Maxwell Gold, director of investment strategy at Aberdeen Standard Investments.
Market forecasts, including Citigroup, predict a rise in metal prices that reached this Friday around USD 1170 per ounce.
Palladium production is very concentrated, as in the case of platinum. Russia and South Africa currently produce around three-quarters of the world's extracted resources, Production of the main production country, Russia, amounted to 81 tons in 2017. The Russian company Norilsk Nickel is the largest palladium producer in the world and accounts for almost 40% of world production.