Why is the price of palladium so high?
The price of this precious metal can fluctuate and is a factor in the theft of catalytic converters due to its resale price. In this article we look at why the price of palladium is high and its numerous uses.
What is Palladium?
Palladium is a precious metal mined primarily in Russia and South Africa. It is white in colour and a member of the ‘platinum group’ of metals that consists of ruthenium, rhodium, osmium, iridium, and platinum.
Which car parts is Palladium used in?
Around 85% of palladium is used in vehicle’s exhaust systems, as part of the catalytic converter, turning toxic pollutants into less-harmful gases before they are released into the atmosphere. It is also used in electronics, dentistry and to make jewellery.
Although research has been conducted into using Platinum in catalytic converters instead, numerous technological advances are required before it can match the performance of existing palladium-based catalytic converters. To reduce costs, many automobile manufacturers have transitioned to lining catalysts with a Palladium alloy, incorporating precious metals Platinum and Rhodium. The ratio of the different components fluctuates with the price of Palladium and other metals.
Because catalytic converters can easily be removed from most vehicles, thieves are taking advantage of the chance to steal and resell the precious metals found inside them. Palladium and platinum found in these car parts can be reused in lab equipment, electrodes, designer jewellery, and even electric fuel cells.
Do electric cars use Palladium?
No, electric cars do not use Palladium. Electric cars don’t burn fuel, don’t have exhaust pipes and so don’t use palladium. However, palladium is used in hybrid vehicles as they use a mixture of electricity and fuel (petrol or diesel).
Why is the price of Palladium so high?
As countries vow to slow, and eventually stop, both the production and sale of petrol and diesel-fuelled vehicles, palladium is seeing a surge in interest. This is much like when the price of metals used to make lithium-ion batteries in electric cars rose in price, as demand was higher.
Palladium is in high demand as manufacturers look for other ways to cut emissions before electric cars become the only option for them. The price of palladium surged almost 50% in 2019 as a shortage in supply was suspected. This was especially prevalent in places like China which has tight regulations to cut down on pollution from vehicles. Meanwhile, in Europe, consumers bought fewer diesel cars over the last two years, which mostly use platinum, and instead chose petrol-powered vehicles, which use palladium.
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