While automakers and their ever more advanced new models are forecasted to need record quantities of the precious metal, the global production of palladium is scuttled by South Africa’s most costly mine strike.
Auto-catalyst maker Johnson Matthey says that although demand for 2014 would reach a new all-time high demand for the metal used in the systems that cut down on emissions, there could be a 1.6 million ounces gap necessary for the year, that could soon be impossible to satisfy because the strike cut down on 60% of production from the world’s second-largest supplier.
The car manufacturers are demanding more, while the supply situation is worsening by the day,” said Paul Christopher, a strategist at Wells Fargo Advisors LLC. “Even after workers return, output from Africa will be lower as mines have been damaged. Palladium will be one of the strong performers this year.”
According to estimates from Johnson Matthey, the auto catalysts used last year no less than 72% of all the palladium extracted globally. The metal is mostly used in catalytic converters for gasoline engines, while platinum is used in the diesel-powered converters. Toughening emissions rules across the world means that today no less than 90% of new cars have gone off the assembly line equipped with a catalytic converter.
by Aurel Niculescu
) - Thursday, June 12th, 2014 - filed under Industry
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