Of the precious metals we refine here at Manhattan Gold & Silver, palladium is the least well known. Perhaps that’s because it tends to play second fiddle in articles of jewelry. For example, palladium is often alloyed with gold to make white gold, but there are not many pure palladium pieces of jewelry. However, as we’ve come to see with other precious metals, there are many other applications for palladium besides jewelry.
The most common use for palladium is in catalytic converters for automobiles and other engine equipped machines. A catalytic converter contains catalysts which convert (hence, the name) the toxic substances in engine exhaust into inert or less toxic substances. This produces a cleaner exhaust that conforms to EPA standards. Catalytic converters can use a number of different catalysts, but palladium is among the cheapest and most effective. Interestingly, catalytic converters are one of the top uses for palladium, and reclaimed catalytic converters are a big source of palladium.
Another common use for palladium is in multilayer ceramic capacitors. These are an important part of common electronics equipment such as cell phones, laptops, fax machines, etc. Palladium is also used in connector plating for a number of electronics.
Palladium’s applications in chemistry and electronics indicate that it may become even more useful as technology progresses. Right now, palladium is being studied to find its potential for use in fuel cells and for hydrogen storage. It just may be the metal of the future. Please keep in mind we do not refine catalytic converters. However, we do process palladium dental and jewelry material, also other high-grade industrial palladium products.
Since PGMs are a necessary component of catalytic converters, pricing trends can sometimes be traced back to activity in the auto industry. Catalytic converters in every vehicle use PGMs as catalysts, which convert (hence, the name) the toxic substances from engine exhaust into inert or less toxic substances. This produces a cleaner exhaust that conforms to emission standards. Catalytic converters can use a number of different catalysts, but the most popular for automobiles are platinum and palladium.
Naturally, a greater demand for automobiles can directly increase the demand for PGMs. Earlier this year, CPM Group released a report predicting that global demand for palladium in automobiles would rise nearly 3% in 2016. Main factors contributing to the prediction included:
• growing Chinese demand for small cars, due to new tax breaks for buyers
• lower oil prices spurring U.S. demand
• a steady demand for autos in Europe, combined with stricter emission standards
Although we can’t speak to the auto industry’s actual performance for 2016, the increased demand for palladium is obvious if you review the prices over the last 6 months. But with electric vehicles continuing to grow in popularity and decrease in price, it remains to be seen whether this correlation between palladium prices and the auto industry will last through 2017 and beyond.