Platinum, Palladium Prices Diverge as Car Makers See Uneven Recovery

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As key ingredients in catalytic converters, both metals are at the forefront of efforts to reduce auto emissions

A strong rebound in Chinese car sales is helping to widen the price gap between palladium—already the most expensive of the major precious metals—and its sister metal platinum.

This year, palladium prices have jumped 27% to $2,404 a troy ounce, while platinum has only recently returned to pre-pandemic levels of $979 an ounce.

As key ingredients in catalytic converters, both metals are at the forefront of global efforts to reduce the harmful emissions from car exhausts. But the price of platinum, which is used in diesel-engine catalytic converters, has stagnated as those cars have lost ground to gasoline-powered automobiles, which use palladium.

That trend is intensifying as China’s gasoline-dominated auto markets rebound, while Europe’s diesel-heavy car sector struggles amid rising new coronavirus cases and lockdowns, analysts said.

Chinese passenger car sales grew at the fastest pace in more than two years in August, according to the China Passenger Car Association, an industry group. However, in Europe, car sales fell 17.6% in August from a year earlier and were down by almost a third across the first eight months of 2020, according to data from the European Automobile Manufacturers’ Association covering the European Union, the U.K. and the European Free Trade Association states.

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