The price of palladium is absolutely exploding – here’s why that’s good news for South Africa (Business Insider SA – January 21, 2020)

Since the start of this year, the price of palladium – a silvery-white metal primarily found in South Africa and Russia – has jumped by more than 22%. In a single day, on Friday, the price increased by $150 an ounce. On Monday, it continued its rally – gaining more than 3%.

It’s now 80% more expensive than a year ago and, since 2016, the palladium price has rallied by more than 400% – from $450/oz to more than $2,300.

Why is palladium in such hot demand?

Palladium has special qualities which allows it to help turn toxic gases into water vapour and other less-dangerous gases. Almost 90% of palladium is used in vehicle exhausts to help reduce emissions from cars. Platinum has similar characteristics, but is not as effective as palladium – particularly not in petrol-fuelled vehicles.

As countries around the world tighten their emission rules for vehicles, so the demand for palladium has increased. In China alone, new emissions standards now requires 30% more palladium per vehicle, according to a Reuters report.

There has also been a shift from diesel (which uses predominantly platinum) to petrol vehicles (mostly palladium), in part due to Volkswagen’s rigging of diesel-emissions testing equipment in 2016.

But while demand is booming, the supply of palladium – which is primarily mined as a by-product of platinum and nickel – is under pressure.

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