Palladium is blazing a record-breaking trail on supply deficit fears, fuelled by strong demand from carmakers as more and more consumers switch from high-polluting diesel to cleaner vehicles, experts say.
The precious metal, which is used in the manufacture of catalytic converters for petrol engines, scored a record pinnacle on Tuesday at $1,568 per ounce.
The commodity, which is mostly mined in Russia and South Africa, was also buoyed by supply-side woes and solid demand from China – despite a recent economic slowdown in the Asian powerhouse.
Palladium has rebounded sharply since striking a one-year low of $836 per ounce in August, when it was rocked by a strong dollar. “Demand for palladium in gasoline autocatalysts has seen strong growth over the last few years, driven by Chinese growth and a declining diesel market share following the Volkswagen scandal,” said Renaissance Capital commodities analyst Steven Friedman.
Volkswagen’s pollution-cheating “dieselgate” scandal has also loomed large since 2015 because it hurt demand for diesel-powered vehicles in the longer term.
