The palladium price fell on Thursday below the platinum price for the first time since April 2018, as growing demand concerns and bets on stable supply weighed on the metal.
Palladium retreated 2.8% to $869.6 per troy ounce, its lowest in five years, while platinum stood at $874.5.Palladium fell by 39% in 2023 after rising prices from 2018 to 2022 caused the auto sector, accounting for 80% of demand, to start replacing it with cheaper platinum in autocatalysts.
The rising adoption of EVs, which do not require any offgas treatment system, further worsened the metal’s prospects. “That means that demand will shrink while supply will remain more or less stable,” said Henrik Marx, head of precious metals trading at Heraeus.
“Palladium prices could easily spike on major supply headlines given the thin liquidity. But we consider such rallies as opportunities for producers to add more hedging positions and for speculators to open fresh short positions, as the long-term outlook remains very negative,” Citi said in a recent research note.
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