Palladium: one of the most precious metals tells us what happens in the auto sector
Palladium is a metal of great value due to its great use on an industrial level, due to its undoubted characteristics as a catalyst. Much of the palladium is used in the automotive industry. Used in exhaust systems , it helps reduce emissions by transforming pollutants into less harmful (such as carbon dioxide) or harmless (such as steam) substances for the catalytic converters of gasoline cars (diesel cars use platinum). It is also used as a catalyst in many organic chemistry processes.
The world supply of palladium is limited and, after South Africa, Russia is the second largest producer in the world. The supply is limited and not easy to increase. This makes it much more valuable than gold.
Platinum is linked to industrial uses, above all, we said, to the automotive sector. Now let's see the futures prices:
After peaking at $ 3200 an ounce in March, as soon as the war broke out, prices fell, although fluctuations followed rumors of subsequent cuts in Russian production. For example, the latest fluctuation, with an increase from 2000 to 2100 dollars, was linked to the rumors of duties for the import of palladium from Russia to the United Kingdom. The drop from the highs is a symptom of a sharp reduction in demand, that is, a decline in the automotive, chemical and electronic sectors that make extensive use of it.
Even in this case, however, there is a problem that we have already seen: if we look at prices on a broader perspective, they are not yet at the pre-crisis level.
It must be said that compared to copper, the return to ante covid values seems faster. Ultimately, the auto industry is reducing demand faster than expected, but the destruction of demand is not yet sufficient to allow for a real reduction in prices. however, given the current cost of energy and the reduction in disposable income, it is only a matter of time before we see it. Only international shocks in the offer, such as the total cancellation of the Russian quota, could still drive palladium prices higher, at least up to a change in the economic parameter.
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The article Palladio: one of the most precious metals tells us what happens in the auto sector comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/palladio-uno-dei-metalli-piu-preziosi-ci-dice-che-succede-nel-settore-auto/ on Sat, 14 May 2022 17:46:36 +0000.