What are the primary uses and applications for palladium?
Palladium in catalytic converters. The manufacture of catalytic converters continues to be the primary use for palladium, with its consumption accounting for approximately 66% of forecast global demand in 2015 (CPM Group Platinum Group Metals Yearbook, 2015). Other major sources include: electronics (14%), dental (8%), jewellery (5%), petrochemical refining (5%) and a range of other, minor industrial applications (2%).
What are the common properties of PGMs?
Palladium is one of the six platinum group metals (PGMs), consisting of: platinum, palladium, osmium, ruthenium, iridium and rhodium. Of the six, palladium has the lowest melting point and is the least dense.
PGMs are known for their:
Strength and durability
Strong catalytic properties
Resistance to oxidation and corrosion
Conductivity and ductility
High melting point
Geological scarcity (much rarer than gold)
PGMs are most commonly used for technological advances in the fields of autocatalysts, power generation, alternative fuel sources, transportation, electronics and healthcare. Growing and anticipated future applications for palladium include fuel cells, hydrogen gas generation from natural gas, nano technology and super-capacity hard drives.
How do the different engine types impact the use of palladium in catalytic converters?
- Petrol engines: use more than 90% palladium in catalytic converters.
- Diesel engines: historically used platinum due to technical requirements, however now use approximately 30% palladium, with a scope to increase to 50% due to the introduction of low sulphur diesel fuel.
- Hybrids & other new power forms: expected to account for <1% of global cars sales in 2015 with a recent decline in popularity noted in the 2015 sale figures for most hybrid vehicle manufacturers. Expected to have a neutral impact on PGM use as petrol hybrids tend to use as much palladium as normal petrol engines.
- Electric: forecast to account for <1% of global car sales in 2015; have no requirement for catalytic converters therefore would have a negative impact on PGM use. Given their current challenges (lack of infrastructure to recharge, high costs, long charging periods and short driving range) and the recent decline in global oil prices, electric vehicles are not expected to be major threats to fabrication demand in the next decade.
What are the current trends in palladium consumption for jewellery?
China remains the largest consumer of platinum and palladium jewellery. Palladium jewellery was introduced to China in 2004 in the form of Pd950 (95% palladium) and in 2005 in the higher purity Pd990 (almost pure palladium) opening up a brand new market. Its lower cost compared to platinum, has made palladium more accessible to more consumers. Most Chinese manufacturers now have the technical ability to work with palladium and combined with low palladium lease rates, benefit from the greater margins from the metal. Recent price-driven declines in palladium (and platinum) demand for jewellery in China and globally have been more than offset by increased demand in the auto catalyst manufacturing sector (see CPM Group Platinum Group Metals Yearbook, 2015).
What is the impact of the palladium ETFs?
Palladium exchange traded funds (ETFs), which have only been around since 2007, have significantly contributed to the increased investor interest in palladium. These ETFs are now trading in Zurich, London, Japan, Johannesburg and New York. Global ETFs’ holdings recently peaked at approximately 3 million ounces of palladium in physical form although recent outflows have reduced this amount to approximately 2.4 million ounces. Looking ahead and assuming a balance between industrial demand and primary and scrap/secondary supply, major changes in global ETF holdings are likely to play an increased role in determining palladium prices in the future.
Content extracted from: Napalladium