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Palladium not likely to continue to outperform Platinum

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NEW YORK (Scrap Register): Those taking part in Platinum Week activities think palladium will continue to outperform sister metal platinum, but BMO Capital Markets does not share this view, analysts with the bank said.

They report attending a panel discussion on platinum group metals, which featured speakers from a number of major producers. Since September, palladium has had a price premium over platinum, which previously had not occurred since 2001.

Palladium has benefited in part from strong sales of gasoline-powered autos, which require this metal. Platinum is used in diesel-powered cars, which have lost market share in recent years. “The panel suggested a $200-300 discount might warrant switching in gasoline catalysts,” BMO added.

 “Interestingly, a poll conducted at the event suggested that 90% of participants expect palladium to continue to outperform. This is not a view we agree with, owing to higher-than-expected levels of substitution,” BMO noted.

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