Palladium prices remain lofty on strong auto demand
NEW YORK (Scrap Register): Palladium, underpinned by demand from the auto sector, has hit a fresh record high of $1,179.40 an ounce for spot metal.
“Pollution-limiting catalytic converter demand in China is boosting palladium consumption, drawing prices 9% higher this year,” said commodities brokerage SP Angel.
The Asian nation is on a mission to reduce smog emissions, with tougher standards meaning car makers are using more of the commodity. Global palladium production is falling short of the robust demand.
Hedge funds are also wagering on an extended rally, with the biggest long positive bet on the metal since early March.
Analysts noted that almost 70% of demand comes from the auto industry, so strong car sales are helping to insulate prices from the “faltering” global growth hampering that is many industrial commodities.
“While the metal is at threat of substitution from its sister metal platinum, manufacturers need 18-24 months for changes to take place, protecting near-term demand,” analysts added.