Demand for less polluting cars causes palladium price to surge
For the first time in 16 years, palladium prices have passed $1,000 per troy ounce. With the gradual move away from petrol and diesel cars – and until electric cars take over – palladium is in huge demand as it is used in catalytic converters that convert the emissions in car exhaust gases into less toxic substances, hence it is very attractive to manufacturers looking for ways to cut emissions. The price of palladium, which is primarily mined in South Africa and Russia, has rocketed by almost 50% this year as investors anticipate a supply shortage.
Forget gold and platinum, because the shiny metal catching the eye of traders is palladium. The price of palladium surpassed $1,000 per troy ounce for the first time in 16 years in trading today.

As countries vow to slow, and eventually stop, the sale of gasoline- and diesel-burning cars, palladium is benefiting from the same surge in investor interest that has pushed up the price of metals used to make lithium-ion batteries in electric cars, such as cobalt and lithium.

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Palladium is used in catalytic convertors that convert the harmful gases in car exhaust into less toxic substances. So before electric cars sweep across the world’s roads, the metal is in high demand as car manufacturers look for other ways to cut the emissions from their fleets. The price of palladium, which is mostly mined in South Africa and Russia, has surged almost 50% this year as investors bet that the market is heading for a shortage in supply.

Speculative bets on palladium’s rise have almost tripled in the past six months, according to the Financial Times (paywall). Last month, the price per ounce of palladium rose above platinum for the first time in 16 years. This might encourage the manufacturers of catalytic convertors to find ways to switch to using platinum in catalytic converters, which is likely to remain cheaper in the near future.

Analysts at JPMorgan forecast the price of platinum to fall to $930 per troy ounce by the end of the year and to $910 by the end of the first quarter of 2018. At the time of writing, the price was about $945 per ounce.