Why is Palladium soaring, while Platinum is lagging?
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Why is Palladium (Pd) soaring, while Platinum (Pt) is lagging? Both are used in catalytic converters, but I have been asking around why auto manufacturers don't just use Platinum instead of Palladium and it appears that they prefer Palladium a lot more and that accounts for the higher demand, I bought some Pd Eagles starting in 2008 and they went up nicely. Does anzyone else have an explanation for the sky high price of Palladium? I remember a few years ago when it was so cheap, like $300/oz,
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Will Pd and Pt maintain their value as more and more people buy electric vehicles which seems to be the wave of the future?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Prior to widespread adoption as exhaust catalyst, palladium wasn't in as much demand as platinum. Platinum had other uses, such as jewelry, where palladium had only limited acceptance. There is also more Pd in Earth's crust than there is Pt. So palladium was historically cheaper on a per oz basis. But Pt lost its edge for at least a couple reasons. One is that Pt is much more dependent on South African mining, and there were some serious mining interruptions about a decade ago. Manufacturers started looking towards more dependable supplies... Pd is also mined in Russia, North America, etc. Next, Dieselgate crushed Pt prices for the past few years. Third, since these catalysts are applied in a thin layer to the catalytic converter's internal structure I am assuming that they require less Pd mass since it is roughly half the density of Pt. As long as exhaust catalyst is a primary use of both, I would think a 2:1 ratio of $Pd/$Pt makes sense in the near to mid term (with likely hundreds of millions of ICE vehicles yet to be built). Fuel cells may hold some promise, mainly for Pt, in the future.
My recollection is that it was about $140 around 2005. Not a few years ago but wish I had bought it.
Pd continues to bust out, driving up those values on our beloved Pd Eagles and such!
I heard the major mining company norlisk nickel had some severe flooding that impacted palladium production causing some sort of shortage
https://www.bloomberg.com/news/articles/2021-02-24/norilsk-nickel-partially-suspends-two-big-mines-on-water-inflow
Check out Johnson Matthey for updates, they are major players in the PGMs
https://matthey.com/en/news/2021/pgm-market-report-february-2021
The catalytic converter topic has been covered quite extensively also, PD being twice as effective than PT in petrol engines, thus switching back to PT would be a wash metal wise (needing twice as much PT) while also costly for R&D and retooling of equipment.
I personally love Platinum jewelry and am intrigued by the unique properties of Palladium, and it’s use in breakthrough technologies.
https://www.google.com/amp/s/phys.org/news/2019-07-scientists-material-solar-cells-efficient.amp
https://www.platinumgroupmetals.net/Lion-Battery/default.aspx
Edit to add prices of metals at the time
Platinum - 1200 ish
Palladium - 2400 ish
It's all about what the people want...
Thanks, Luke, for the resources!