The price of palladium has reached record levels soaring more than 9% on the New York Stock Exchange this year, which is the best performance of the year among the major metals. And investors bet that this race has just begun, reports Bloomberg.
The market has a very positive fundamental perspective
According to the CPM Group, almost 70% of demand Palladium comes from the automotive industry. The metal, which is mainly used in catalytic converters, has benefited from the automotive industry's transition from diesel engines to gasoline engines. This change is driving demand in markets that currently have limited supplies.
Experts point out that Chinese fight against & # 39; smoke & # 39; it is another factor that contributes to the increasing demand for palladium, because stricter pollution standards have caused car manufacturers to use more catalytic converters.
"The market has a very positive fundamental perspective (…) We have dealt with the supply deficit that has occurred for eight years, and it is expected to continue. Supply is certainly a problem in front of mining, as well as reducing existing stocks, "said Maxwell Gold, director of investment strategy at Aberdeen Standard Investments.
Market forecasters, including Citigroup, project a higher price increase for metals, achieved this Friday around $ 1,170 per ounce.
Palladium production is highly concentrated, as is platinum. Russia and South Africa currently produce around three quarters of the inventory mined in the world. Production of its main producing country, Russia, is 81 metric tons in 2017. Russian company Norilsk Nickel is the world's largest producer of palladium, and accounts for almost 40% of world production.