What's the Palladium story?
Steve27 Posts: 13,220 ✭✭✭
Other than down, down, and down.
Fear of EVs, which don't need catalytic converters?
Shift to a new type of catalytic converter?
"It's far easier to fight for principles, than to live up to them." Adlai Stevenson
You need a longer time perspective. Actually palladium is WAY up.
Way up from when I bought a Palladium 1oz Panda for $150
I think that automotive is beginning to gravitate back towards platinum a little bit, but not completely.
I knew it would happen.
Some Pd is being replaced with Pt in catalytic converters, but a bigger issue right now for Pt, Pd, and Rh is that worldwide passenger vehicle production plummeted during the pandemic and is nowhere near a full recovery. So previous deficits (in Pd and Rh) are now surpluses. Even growth in BEV sales has slowed. Not to mention individual car ownership is predicted by some to be far less common in the future due to affordability.
Fears of hidden stockpiles being sold by Russia to raise cash.
I would NOT want to be long palladium over the intermediate and long-term.
The car companies are saying they're going to be able to greatly increase production this year, so if this is the driver, we should see the price turn around in the next few months.
Maybe. Hopefully. Depends a lot on China's economy and their non-BEV vehicle production. US might produce around 14M units, but that well below the highs of around 17M. I think that substitution will keep Pd prices in check (from approaching recent highs) for the near term. I think Pt has better risk-reward potential right now. Another thing that may limit the upside of PGMs in the midterm is their byproduct status. Most of it comes from nickel and copper mines. So as more lithion ion batteries are produced for BEVs, more nickel and copper will need to be supplied, thus higher PGM supplies as well regardless of demand. I own Pt, Pd, and Rh so I am hopeful for all of them to do well, but I am less certain than I was a year or two ago.
I am not sure you are going to see that increase. Too much cost inflation and supply/labor constraints.
The domestic U.S. auto companies used to produce 17 million cars, flat-out. Today, it's closer to 13 million. The days of going for market share and offering discounts leading to reduced profitability are over. They need profits and cash flow to finance EVs.
I would be SHOCKED if U.S. and global auto production gets back to the pre-Covid days anytime soon. Meaning reduced demand for the white metals.