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In recent years, a new precious metal has emerged as a strong competitor to gold for the throne of safe investment, especially during times of epidemics, wars and political tensions that negatively affect investors’ appetite for risk and push them to search for safe havens to invest their money.
Although it was discovered in 1803, the luster of palladium has increased in the eyes of investors over the past four years, after achieving record price booms, until it became more expensive than gold itself. The price of palladium reached its highest level in history on February 27, recording $ 2,882.11 per ounce, compared to $ 1,661.40 per ounce of gold on the same day, before the Corona pandemic began to paralyze the global economy.
During last Friday's trading, the price of palladium recorded $2,435.6 per ounce, while the price of gold recorded $1,934 per ounce. Palladium has risen by about 26 percent since the beginning of 2020, while gold prices have increased by 25 percent during the same period.
Palladium is 30 times rarer than gold and is one of the six elements in the platinum group, which are known to be excellent catalysts for speeding up chemical reactions. Gold is also a secondary metal, meaning it is extracted from platinum and nickel mining operations, and has very important physical properties that can be used to reduce carbon emissions by up to 90 percent.
About 80 percent of palladium production is used in the automotive industry to reduce carbon emissions from car exhausts. It is also used in many industries, including: “electronics, dentistry, chemical applications, jewelry (hence it is called white gold), water treatment, and a number of other industrial products.”
Palladium's importance, in addition to its properties and versatility, stems from its rarity. According to the website "investing.com", above-ground palladium reserves have decreased by 5.3 million ounces (165 tons), or about 30 percent, since 2010.
Metals consultancy Metals Focus expects a palladium shortfall of 124,000 ounces (3.9 tonnes) this year, which would be the smallest deficit in the palladium market since the market was last in surplus in 2011. In 2016, the deficit was 1.29 million ounces.
With the European Union tightening its conditions to reduce harmful emissions, especially those related to car exhausts, especially in 2015 after the scandal of the German car manufacturer Volkswagen manipulating the measurement of car exhausts and falsifying the data related to that, the demand for palladium increased significantly due to its basic entry into the car engine industry, which led the white metal to achieve record price booms.
Global car companies coat the catalytic converters with a thin layer of palladium, which when fuel is burned reduces the levels of carbon monoxide, nitrogen oxide, and nitrogen dioxide before they are expelled through the exhaust system outside the car in the form of water and carbon dioxide.
“A treasure exposed to theft”
According to the Euronews website, some cities in Europe and the United States witnessed a significant increase in the theft of catalytic converters in 2019, to obtain palladium metal after recycling these converters.
Authorities in Virginia, USA, recorded more than 15 thefts of catalytic converters from cars left on the street in just two months last year, and British police have recorded a number of thefts of cars such as BMW, Audi and Volkswagen, which are the most heavily loaded with palladium, which is sold in scrap metal markets for prices reaching up to $400.
Small cars and light trucks, according to the site, contain 2 to 6 grams of palladium, while all-wheel drive vehicles that produce higher exhaust rates contain about a full ounce of palladium, or about 31.1 grams.
British media websites circulated a video clip of the thief stealing the transformer during the day and on the public road, causing a traffic jam, without paying attention to those around him or the heavy traffic he caused. As soon as he finished his “work,” he returned and got into his car, which he parked near the stolen car, amid the astonishment and confusion of the person filming the video.
In Missouri, thieves have set their sights on trucks. Pollution control devices were taken from about 20 trucks parked at a single location near St. Louis earlier this month, a smart choice since larger vehicles use more platinum metals in their converters.
Top Producers
According to the “Arqaam” website, Russia, South Africa, Canada, the United States and Zimbabwe are the five largest palladium producing countries in the world.
Russia produced 81 metric tons of palladium in 2017, while South Africa produced 78 tons, Canada 19 tons, the United States 13 tons, and Zimbabwe 12 tons, according to the same source.
The Russian company Norilsk Nickel ranks first among the largest palladium producers in the world, representing 39 percent of global production.
Ways to invest in palladium
Analysts and experts say that there are several ways to invest in palladium, including: buying palladium bullion, investing in palladium futures contracts traded on the New York Mercantile Exchange and the Tokyo Commodity Exchange, investing in palladium exchange-traded funds, which are open-ended investment funds backed by palladium bullion, or buying shares in palladium mining companies (companies that operate in palladium mines and produce them).
Source: websites