The global commodities market has seen the price of palladium skyrocket by more than 25 per cent in the last two weeks alone after almost doubling in value over the last year. Currently, the precious metal has is worth more than gold at $2,500 an ounce.
Palladium is a shiny, white metal in the same group as platinum, ruthenium, rhodium, osmium and iridium.
Carmakers use palladium as a critical component in catalytic converters (part of a car´s exhaust system that controls emissions and removes noxious gases) which are mainly found in petrol and hybrid vehicles.
The metal´s soaring value in recent years has correlated with a surge of catalytic converter theft worldwide. London´s Metropolitan Police has reported that the number of thefts during the first half of 2019 was over 70 per cent higher than the whole of the previous year.
The need for the material surpasses supply so much that 2019 was the eighth year in a row that palladium was below the amount necessary to reach global demand.
According to Reuters, China will require at least 30 per cent more palladium per vehicle which adds extra pressure on to the already strong global demand that is predicted to reach 10 million ounces this year and next.
A large proportion of the globe´s palladium supply comes from Russia and South Africa; most of which is extracted as a by-product in the mining of other metals such as platinum and nickel, meaning miners have less flexibility to increase palladium production.
South Africa provides around 40 per cent of the world´s supply and last week, the country said that its output of platinum group metals, including palladium, dropped by 13.5 per cent in November year-on-year.