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Palladium Outranked Gold in Commodities Trading

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Photo: Stas1995

Palladium, a precious metal commonly used in vehicle’s catalytic converters, recently topped gold in commodities trading. This is the first time in 16 years that palladium has outpaced gold in the commodities market. It is also one of the top-performing commodities in 2018, per The New York Times contributor Tiffany Hsu.

For those less familiar with palladium’s overlap with the auto industry, more than 80 percent of palladium resources goes toward catalytic converters. This precious metal, along with platinum and rhodium, helps autos manage pollutant output. It does this by reacting with hydrocarbons, nitrogen oxide, and carbon monoxide to make these chemicals less harmful.

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More about palladium

But exactly what is palladium? It turns out that this precious metal is a cheaper “close cousin” of platinum. It is also part of the “noble metals” category of metals, due to its corrosion- and oxidation-resistant qualities. British scientist William Hyde Wollaston discovered palladium back in the early 1800s. He named it after a recently identified asteroid, Pallas. Besides its use in cars, palladium is also used in surgical instruments, as well as in some electronics and smartphones. It’s even used in the jewelry industry to make men’s wedding rings, since its a hypoallergenic metal.

The passenger car factor

The increasing demand for palladium had its roots in the 1970s, when the auto industry started implementing tailpipe emissions regulations. The more recent surge in demand, however, stems from the stricter emissions regulations and manufacturer-imposed efficiency objectives. Many manufacturers are using more palladium, to help comply with these revised standards and emissions reduction goals. Consulting firm Metals Focus predicts that the demand for palladium (for use in catalysts) will reach a record high of 8.5 million ounces by the end of this year.

It will be interesting to see how palladium performs in the commodities market in 2019, as the industry continues to crack down on emissions and seek new ways of improving vehicle efficiency.


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News Source: The New York Times