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Palladium Supply and Demand

Palladium Price

Palladium is considered an industrial metal due to its largely industrial uses. During times of economic stability or growth the demand generally rises. During economic uncertain times the demand generally falls.

A large component of overall palladium demand is palladium's use as a autocatalyst to control harmful vehicle exhaust emissions. Johnson Matthey produced an interesting report in 2013 called "The components of autocatalyst demand". Of particular interest is the breakdown of different combustion engine vehicles, light duty gasoline (LDG), light duty diesel (LDD), heavy duty vehicles (HDD), and non-road mobile machinery (NRMM) and their associated palladium demand. In the wake of the Volkswagen emissions scandal the price of palladium rose and the price of platinum fell due to the market's belief that gasoline cars become more popular over diesel cars in the future which would increase demand for palladium autocatalyst and decrease demand for platinum autocatalyst. Volkswagen is aspiring to be a World leader in e-mobility (electro mobility) by 2018, and some have speculated that the push towards e-mobility has been accelerated by the fallout from their diesel emissions scandal.

Lastly, the majority of World palladium supply comes from South Africa, and in particular the Bushveld Igneous Complex (BIC). Over the years palladium producers in South Africa have had issues with strike actions from unions, with the most recent in November 2014. Palladium production is either alongside other platinum-group metals (PGM) or other base metals, such as nickel or copper.


Palladium Supply History

Palladium supply in 2013 was from South Africa (74%), Russia (13%), Zimbabwe (7%), North America (6%), and Others (4%).

The palladium supply and demand for 2013 were:

  • Total Supply was 6.177 Moz.
  • Total Gross Demand was 10.470 Moz.
  • Total Recycling was 2.681 Moz.
  • Total Net Demand was 7.789 Moz.
  • Movement in stock of -1.612 Moz.

Please note that:

  • Before 2005 "Zimbabwe" was included in "Others".
  • Russian supply is separated into primary (mine) production and Russian stockpiles.
    

Source: Johnson Matthey - Market Data Tables


Palladium Gross Demand History

Palladium demand in 2013 was made up of autocatalyst (68%), jewelry (3%), industrial (20%), and investment (9%).

Please note that:

  • Before 1986, "Chemical" demand is included in "Other".
  • Please note before 2005 "Jewellery" and "Electrical" demand is net of recycling (Demand = Demand - Recycling).
    

Source: Johnson Matthey - Market Data Tables


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Palladium Recycling History

Please note before 2005 "Jewellery" and "Electrical" demand is net of recycling (Demand = Demand - Recycling). Thus since demand is greater than recycling, they are not shown in recycling chart before 2005.

    

Source: Johnson Matthey - Market Data Tables


Palladium Net Demand History

Palladium net demand is gross demand minus recycling.

    

Source: Johnson Matthey - Market Data Tables


Palladium Movement in Stocks

Movement in stocks is the difference between net demand and supply. This indicates whether palladium supply is in a surplus or deficit.

    

Source: Johnson Matthey - Market Data Tables