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Despite investor perceptions of an oversupplied
market, the price of palladium is likely to take its
lead in the short term from the platinum price.
Palladium has surpassed its May 2006 high of US$
404 an ounce and could achieve a cyclical high of
US$ 550 later in the year if platinum continues on
its upward trend. Of course, as mentioned above,
such a move could be derailed by a sustained period
of financial market decline in the USA and in other
leading world economies.
Rhodium supply deficit
The rhodium price recently topped its 1990 high
of US$ 7200 an ounce, rising above US$ 7400 on
investor concerns surrounding supply losses in
South Africa. Last year’s supply deficit coincided
with steadily increasing demand for the metal, par-
ticularly from the automotive industry.
South Africa accounts for approximately 85% of
total new mine supplies but strike activity, tempo-
rary closures following fatalities and sporadic pow-
er outages may have led to rhodium supplies drop-
ping as much as 10% short of market expectations
last year. Compared to 2006, output was some
75 000 ounces lower.
If the market focus shifts to fears of a pending
recession and if the current broad correction in
world financial markets is to continue, then the
long-term growth trend in rhodium consumption
could be hampered. With the automotive sector
dominating demand for the metal, and with limited
investment interest, rhodium could become increas-
ingly vulnerable to a global economic slow-down.
But if this brake is not applied, growing demand for
the metal should limit the impact of any near-term
corrective phase, with the price of the metal possi-
bly rising to US$ 8500 an ounce later in the second
half of 2008.
Car sales set to grow
Steady growth in new vehicle sales – principally
in the developing markets of Asia – are helping to
drive demand for PGMs.
Passenger car sales in China jumped 22.8% to 5.66
million units in the first 11 months of 2007 compared
to the same period in 2006. Total vehicle sales in
China were projected to reach 8.7 million units for
2007 as a whole – equivalent to a 20.8% gain over the
7.2 million sold in 2006. Total sales could surpass 10
million units by the year 2010 and could possibly dou-
ble to 20 million by 2020, according to predictions.
Sharp growth in car sales has also been recorded
in India. Passenger car purchases climbed 22% dur-
ing the 2006/2007 sales year, with projections of a
15-20% annual growth rate over the next decade.
Passenger car sales of approaching 1.08 million
units were dwarfed by the 7.86 million motorbike
and scooter sales. However, a greater selection of
more affordable cars, increasing wealth and
improved roads/infrastructure should combine to
prompt motorbike users and first-time buyers to
trade up to a passenger car.
In Russia, car sales were expected to top 2.4 mil-
lion units for 2007 as a whole. Meanwhile, vehicle
Recycling International • April 2008 51
P R E C I O U S M E T A L S
Palladium
Palladium is a rare and lus-
trous silvery-white metal that
was discovered in 1803 by
William Hyde Wollaston. The
symbol for palladium is Pd,
and its atomic number is 46.
Palladium, along with plat-
inum, rhodium, ruthenium,
iridium and osmium form a
group of elements referred to
as the Platinum Group Metals
(PGMs). Palladium is unique
in that it has the lowest melt-
ing point and is the least dense
of these precious metals. When
palladium is at room tempera-
ture and atmospheric pressure,
it can absorb up to 900 times
its own volume of hydrogen,
which makes palladium an effi-
cient and safe storage medium
for hydrogen and hydrogen iso-
topes. Palladium is also tar-
nish resistant, electrically sta-
ble and resistant to chemical
erosion as well as intense heat.
Over half of the supply of pal-
ladium and its sister metal plat-
inum goes into catalytic con-
verters. Palladium’s precious
metal qualities and appearance
generate significant consump-
tion in the luxury jewelry mar-
ket. Palladium is found in many
electronics including comput-
ers, mobile phones, multi-layer
ceramic capacitors, component
plating, low voltage electrical
contacts, and LCD televisions.
Palladium is also used in den-
tistry.
Palladium based alloys are widely used for making dental prothesis.
(Photo: DeguSafe)
Platinum Price
$750
$900
$1,050
$1,200
$1,350
$1,500
$1,650
$1,800
$1,950
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Palladium Price
$150
$190
$230
$270
$310
$350
$390
$430
$470
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Rhodium Price
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
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