The price of palladium, which has been growing steadily, broke an all-time high on Friday, exceeding $2,900 per ounce, according to trading data.
June palladium futures surged almost 3% to a maximum price value of $2,929, surpassing the previous record set in February 2020. Spot palladium jumped more than 3% to $2,930. By the end of the trading day, both gave up some of the gains, with spot palladium closing at nearly $2,860 and futures standing at around $2,856.
The precious metal has been growing for the third month in a row, gaining over 30% during that time. The price spike comes amid growing concerns that rebounding demand from automakers will exacerbate a supply shortfall. Palladium is in high demand in the automotive industry. The metal is traditionally used in catalytic converters aimed at controlling exhaust emissions by converting toxic gases and pollutants into less-toxic pollutants.
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The palladium market has been in a production deficit for several years.
“Basically, there will be a significant shortage this year and automakers need to replenish their stocks,” head of metal derivatives trading at BMO Capital Markets Tai Wong told Bloomberg.
The vast majority of the rare metal is extracted from mines in two countries. Over 80% of palladium global output comes as a byproduct from nickel mining in Russia and platinum mining in South Africa.
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