Palladium prices reached record levels, jumping more than 9% on the New York Stock Exchange this year, which is the best performance this year among the major metals. And investors are betting that this race has just begun, Bloomberg reports.
The market has a very positive fundamental perspective
According to the CPM group, almost 70% of the demand Palladium comes from the automotive industry. The metal, which is mainly used in catalytic converters, benefits from the transition of the automotive industry from diesel to gasoline engines. The change has led to the search for a market that currently has a limited supply.
Experts point out this The Chinese struggle against "smog" this was another factor that contributed to the growing demand for palladium as tougher pollution standards led car manufacturers to more catalytic converters.
"The market has a very positive fundamental perspective (…) We are dealing with the supply shortage that is happening for eight years, and this is expected to continue. Supply was certainly a problem on the mining front as well as a reduction in existing stocks, "said Maxwell Gold, director of investment strategy at Aberdeen Standard Investment.
Market forecasts, including Citigroup, forecast higher increases in metal prices this Friday about $ 1,170 per ounce,
The production of palladium is very concentrated, as is the case with platinum. Russia and South Africa are currently producing around three quarters of world yieldsThe production of its main producer country, Russia, was 81 metric tons in 2017. Norilsk Nickel, Russia's largest producer of palladium in the world, accounts for nearly 40% of world production.