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Palladium surged to a record high on Wednesday amid growing expectations that rebounding demand from automakers will exacerbate a supply shortfall.
Spot palladium jumped as much as 4.7% during the session to $2,899.50 per ounce, surpassing the previous record set in February 2020. Prices have climbed more than 17% in 2021, building on five straight annual gains.
(Click here for an interactive chart of palladium prices)
The palladium market has been in a production deficit for several years, and tighter pollution standards in Europe and China are spurring demand for the metal, which is commonly used in catalytic converters to curb emissions in gasoline-powered vehicles.
Disruptions at Russian mines run by Norilsk Nickel, the world’s largest producer, have added to supply concerns.
”It’s a confluence of factors that’s driving palladium,” Tai Wong, head of metals derivatives at BMO Capital Markets, told Bloomberg. “Fundamentally, there’s going to be a material deficit this year and automakers need to restock.”
Palladium is “benefiting from firming commodity demand readings and expectations for deficits following the Arctic mine disruptions,” TD Securities said in a note to Reuters.
(With files from Bloomberg and Reuters)
