The hottest crazy precious metal price doubled in

2022-08-05
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Crazy precious metal: the price doubled over gold in two years! Dark horse or foam

since the beginning of 2017, the spot price of palladium has more than doubled in two years. Take a closer look. In 2018, palladium prices soared by 46% in four months and surpassed gold prices in December of the same year, the first time since 2002

the National Insurance Crime Bureau (nicb) of the United States once announced that thieves in some cities in the United States are very keen to steal the catalytic converter of cars in recent years. One of the reasons is that the catalytic converters of cars contain a small amount of palladium, which is expensive, making these converters even sell for hundreds of dollars on the black market

palladium, a member of the platinum group, is similar in appearance to platinum. These two metals are mainly used in automotive catalytic converters to purify exhaust gas, but they go two ways in the current price trend

since the beginning of 2017, the spot price of palladium has more than doubled in two years. In 2018, palladium prices soared by 46% in four months and surpassed gold prices in December of the same year, the first time since 2002

since 2019, palladium prices have risen by another 17%. On February 20, palladium hit another record high in the spot market, briefly breaking through $1500/oz. Palladium futures in March also briefly touched $1479/oz. Palladium futures rose 22 percent, twice as much as copper and four times as much as gold

price foam? Oxide inclusions are easy to form holes and cracks in the process of tensile deformation, especially high-temperature tensile deformation.

compared with platinum with similar properties and functions, at the end of September 2017, the price of palladium surpassed the price of platinum for the first time in 16 years. At present, the price of palladium has reached 1.8 times the price of platinum, which has never occurred before. Over the past decade, platinum prices have been higher than palladium prices for a long time

palladium is not a financial commodity for risk avoidance and investment. It is mainly a raw material for industrial applications. Palladium is mainly used to make catalysts in chemistry. It is an indispensable key material in high-tech fields such as aerospace, aviation, navigation, weapons and nuclear energy, as well as in automobile manufacturing. It can also be used to make dental materials, jewelry and surgical instruments. In the automotive industry, palladium is mainly used for catalytic converters of gasoline vehicles and also for increasingly popular hybrid electric vehicles

xuena, precious metal analyst of Nanhua futures, told the international finance news that palladium prices have hit new highs recently. In addition to the good overall rising atmosphere of precious metals, the main reason is that the supply gap has widened due to the decline in palladium supply and the growth in demand, which has led to the continuous decline of ground inventory

as consumers' preference shifted from diesel vehicles to gasoline vehicles, buyers flocked to buy palladium used for automotive catalytic converters, resulting in a sharp rise in palladium demand

according to xuena's analysis, palladium is the most scarce precious metal among all precious metals. At present, governments around the world continue to increase their environmental protection policies. Platinum and palladium are mainly used in automotive catalytic converters to purify exhaust gas, but platinum is more used in diesel vehicles. Since the outbreak of the Volkswagen emission control scandal in 2015, the demand for diesel vehicles has decreased significantly, and palladium has benefited from the shift of diesel engines. In addition, the national VI emission standard implemented by the Chinese government is also expected to boost palladium demand. On the other hand, the global palladium supply declined in 2018 and was concentrated in South Africa and Russia. There are geopolitical risks in the concentration of supply

the annual total output of palladium is less than 5 ‰ of gold, and the scarcity also leads to the continuous rise of palladium prices. James steel, precious metals analyst at HSBC, said that at present, there is no real substitute to replace palladium. Russia and South Africa account for 75% of palladium mining. He believes that the market believes that platinum can replace part of palladium, "but it will take several years. The two metals belong to the same group on the list of chemical elements, but they act in different ways at different temperatures"

Anton Berlin, the world's largest palladium producer and head of market development at Norilsk Nickel in Russia, also confirmed that the risk of automobile manufacturers switching from palladium to cheaper platinum is very low. Even though the gap between the two has increased, "it is not easy. You need to research and develop and register the technology, which may take up to 18 months"

as for the current price of palladium, James Steele believes that there is a sentiment that attracts a lot of investment, which makes the price of palladium far from equilibrium

some analysts also believe that the rise of palladium has gone too far, and the price risk has become greater and greater

xuena pointed out that "palladium supply exceeds demand all the time, but on the one hand, the continued sharp rise in prices after 2015 has led to a continuous decline in palladium ETF positions; on the other hand, the sharp rise in prices will also enable auto companies to actively develop palladium substitutes, which will be the end of palladium gains in the future when major progress is made in the research and development of substitutes."

however, the foreseeable negative factors are not enough to shake the short-term upward momentum. Part of the reason is that the market demand for palladium will continue

Johnson Matthey, the world's largest platinum group metal processing and dealer, reported that it is expected that the supply gap in the palladium market will reach 1million ounces this year. The reason is that the global emission standards are becoming stricter, which will drive the demand for palladium in catalytic converters, and the supply may be difficult to catch up

"in addition, from the market point of view, the recent US economic recovery is OK, and the Federal Reserve is still discussing raising interest rates. If the future economic recovery improves or inflation is stronger, the interest rate increase is expected to rise, the precious metal probability will fall, and the rise of palladium will also be affected. However, in the medium term, palladium will still be the most powerful precious metal." Xuena said

who wins

palladium prices tend to fluctuate, but such price fluctuations are not only reflected in palladium, a precious metal

when the demand exceeds the supply, the precious metals that the automobile industry needs to use in a small amount have a history of soaring prices. In the ten years after 1998, platinum prices soared by more than 500%. At that time, the shortage of platinum caused speculation by speculative buyers

before the automobile manufacturers found a way to reduce the use of rhodium, rhodium rose by more than 4000% in the same period

palladium prices also jumped 9 times from the low point in 1996 to the peak in 2001 due to users' concern that sales in Russia will slow down

who is the winner and who is the loser in the recent palladium price rise

first of all, it is certain that palladium producers have benefited a lot from it. In the latest available statistical report for the first half of 2018, Norilsk Nickel said that 36% of the company's $5.4 billion revenue came from palladium

this rally is particularly good news for platinum miners in South Africa, who are mining and processing palladium with major metals, while platinum prices are currently hovering at a ten-year low

however, the consumer end will eventually become the victim, because the automobile manufacturers have to pay more for the metal and may eventually pass on the increased prices to the consumers

precious metals generally rose

palladium prices hit new highs, which is a "dark horse" among precious metals. However, on the whole, the prices of precious metals are currently in the rising range

precious metal is a defensive asset category. Due to the tension caused by the weakening US dollar and the slowdown of global economic growth, the gold price also rose by 5% this year

as for the recent general rise of precious metals, xuena believes that the main reason is that the US economic growth has slowed down since the fourth quarter of last year, and the US stock market has fluctuated sharply, which makes the market expect that the US Federal Reserve will slow down interest rate hike, suspend interest rate hike or even cut interest rates, that is, the looser monetary policy is the main reason for the rise of precious metals

"The future depends on the economic growth of the United States. The United States is at the end of the recovery phase of the economic cycle. If it falls into recession and the Federal Reserve cuts interest rates to save the market, the precious metal market will probably usher in a bull market. However, the recent performance of the U.S. economic data is OK. The minutes of the Federal Reserve meeting revealed that the interest rate hike is still under discussion. The probability of the U.S. economy falling into recession within the year is not high, so the bull market rate of precious metals will probably not come in the short term. It is suggested that investors should take a short Don't chase the rise, and focus on the Fed's monetary policy in the future. " Xuena said

independent analysis of its glassy appearance makes the windows look bigger. Analyst Bob Kirtley also believes that in the short term, profit taking will bring some selling pressure, making investors leave the market to wait and see

xuena suggested that in the future, the supply-demand contradiction of palladium is still the most prominent among precious metals, and it is expected that palladium will still be the strongest among precious metals. It is suggested to carry out arbitrage transactions between palladium and other precious metals, such as buying palladium and selling platinum or gold at the same time, so as to avoid the general decline of precious metals in the future due to the tightening of monetary policy by the Federal Reserve

analysts at Citigroup believe that the combination of "macro" and "micro" factors has promoted the excellent performance of the precious metal market. The main downside risk is the trump administration's new tariff policy or the emergence of Britain's "hard brexit". However, Citigroup is still optimistic about metals, especially copper, palladium, iron ore and zinc. The prices of these metals are expected to rise by 8-15% in the next three to six months

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