SINGAPORE – Palladium climbed above $1 000 an ounce for the first time since 2001 as demand grows for the metal in pollution-control devices for gasoline-powered vehicles.
The metal rose as much as 1% to $1 000.84 on Monday. Prices have advanced 47% this year, outperforming other precious metals, with gold increasing 14%, silver adding 9% and platinum up 4.7%.
The metal, used mostly in catalytic converters, is more expensive than its sister platinum, used to cut pollutants from diesel vehicles, which are less popular, particularly in western Europe, after some automakers admitted to cheating in emissions tests.
Things could get worse for platinum. The European diesel-engine market share could halve by 2025, potentially removing 300 000 to 600 000 ounces of platinum demand over the next ten years, according to Citigroup Inc. Palladium, on the other hand, is expected to remain in deficit, although it will begin to ease over the long term, the bank says.
“Despite the PGM spread inversion since the end of September, we remain favourable to palladium over the short term,” Citigroup analysts including Nell Agate wrote in a note dated Oct. 13. “However, ever-looming substitution risks prevent an outright bullish view on palladium over the long-term.”