At the end of 2019, the palladium market experienced a drop in supply by 950,000 ounces (29.54 Mt). Throughout the year, the metal’s price had been on the rise, until it reached a historical maximum.
Besides, the demand for palladium has been historically high in the automotive sector.
The PGM Market Report, published in major by Johnson Matthey, contains interesting data on the evolution of palladium over the past year. The metal has stood out in its own right among the rest of precious metals in recent years.
According to the report, the palladium market closed the year with an increase of its shortage. Besides the limited growth in the supply and increased demand in the automotive sector, the report also mentions the tightening of legislation regarding polluting emissions in China and Europe.
Russia is still the world’s largest producer of the metal, with 2.98 million ounces (93 Mt) produced. This is almost the same amount the country has produced over the previous year.
South Africa stands at second place, with 2.62 million ounces (81.6 Mt), a slight increase from 2.54 million (79 tons) a year earlier.
The rest of the palladium producing countries contributed together 1.45 million ounces (45.3 tons), for a global total of 7.07 million (219.9 tons).
Additionally, the supply from recycling, which rose to 3.43 million ounces (106.6 tons), exceeded the figure obtained the previous year.
Demand for palladium is rising sharply
On the demand side, the automotive sector recorded its highest number in history with 9.64 million ounces (299.7 tons), 9% above the 8.83 million ounces (274.6 tons) from 2018.
According to the report, the tightening of emissions legislation and control systems triggered the average palladium content in catalysts to increase. In gasoline cars, the increase comprised 14%, with double-digit growths in both Europe and China.
According to Johnson Matthey, the other sector that demanded palladium the most was the industrial sector. It had a 1.76 million ounce demand (54.8 tons), 8% less than the previous year.
By region, China surpassed North America as the largest consumer of palladium in 2019. The country used 2.67 million ounces (83 Mt) of palladium compared to 2.1 million (65.3 Mt). The report says that the reason for the reversal was the introduction of Chinese legislation on polluting emissions.
By adapting to this new legislation, the palladium load increased by around 20% in vehicles.
Additionally, the use of palladium for the manufacture of catalysts for heavy vehicles increased.
Europe raised its demand for the metal to 2.05 million ounces (63.8 Mt), while Japan registered 911,000 ounces (28.3 Mt).
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