Palladium climbs back to near $1000

Palladium prices rose on Friday as the dollar stabilized against most major rivals, while markets assess latest US data. 

Palladium Production 

Palladium tumbled 39% in 2023 after strong gains in 2018-2022 due to automotive demand, however it has recently been substituted by the cheaper platinum in the manufacturing of catalytic converters to reduce harmful emissions in cars. 

Also as EV cars spread in the market, the prospects for palladium worsened further. 

It means that as demand diminishes for the metal, supply remains stable, creating an imbalance.

On the other hand, platinum is on a more favorable ground for its extensive usages outside the automotive sector, including in jewelry. 

As for the stable palladium supply argument, it’s because palladium is usually mined in a basket with other metals, which curtails the ability to control the production of the metal.

South Africa and Russia produce 80% of global palladium supplies, with the rest mined in North America. 

No announcements of reduced production have been made from Russian or South African major producers so far. 

A Reuters source in a major mining company said that South Africa and America won’t pause production or reduce it. 

Otherwise, the dollar index stabilized at 104.3 as of 16:29 GMT, with a session-high at 104.6, and a low at 104.2. 

Palladium March futures rose 0.8% as of 16:30 GMT to $960.5 an ounce.