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What Moves the Palladium Futures Price?

palladium price study

Palladium futures price made an all-time high in 2011. Besides the commonly known gold and silver metals, what is palladium?

It is a precious metal, and is discovered in 1803 by William Hyde Wollaston. It was named after the Pallas asteroid for a Greek Goddess of Wisdom. The metal is readily workable and used in scientific experiments. Sometimes used in conjunction with platinum, but also associated with copper, nickel, and gold. It can be reused.

This metal can absorb up to 900 times its volume when used in purification and processing and commands a high price on the open futures market.

It is available in its pure form as well as alloyed form and can be quite costly even though it is not the most expensive metal. Industrial use tops the list of significant applications. The uses of palladium are varied. From jewelry to auto catalyst converters, the metal is very versatile.

It can also be used to produce white gold when alloyed with gold, surgical instruments, and it replaces platinum in the auto catalyst industry as a lower cost substitute.

palladium point and figure chart

Palladium Futures Price History

There are quite a few things that can move the prices of palladium. The auto industry is certainly one area that can fluctuate the prices. In late 2000 and early 2001, the palladium futures price reached an all-time high of almost $1,100 per ounce. This was due to the panic by the auto manufacturers because of supply disruptions. At this time, platinum is at the same price.

Another move in palladium futures price can be caused by the actions of Russia, who is the largest supplier. Over half of the world’s supply comes from this country. And, when Russia withholds supplies from the world markets, palladium futures price fluctuate. The status and supply amounts are a state secret in Russia.

In 2000, the price of palladium fluctuated greatly because of the delivery interruptions from Russia. The price was at $433 in January 2000 and went to $785 per ounce in February 2000, peaking at $800 per ounce.

Industrial usage can cause a fluctuation in the price. It has risen from under $200 per ounce in the beginning of 2009 to over $700 per ounce currently. The palladium futures market is the avenue for meeting the demand of industrial end consumers. And, this can affect the price when those demands are high or low. Another factor is the use of low fuel cars because these cars require less of the metal to produce.

The palladium futures price was $1,125 per ounce in January 2001, the highest since 1993. In 1993, the cost was influenced by the European Union establishing emission regulations that required the use of catalytic converters. Because it is a major metal used in the manufacture of these converters, this definitely caused the price to increase.

Daily Palladium Prices (NYMEX)

Palladium Futures Price Correlation

The price of platinum and its supplies also affects the palladium. In many instances, the prices are directly related to each other because palladium is an option when platinum cannot be acquired.

In summary, palladium is a precious metal that is used mainly in the industrial arena, but also in the manufacture of jewelry and for other scientific uses. The palladium price can be moved by the auto industry because of its use in the manufacture of catalyst converters. It can also be moved by the cost of platinum, as it is a low-cost substitute for platinum.