Reverse picture in precious metals: Monthly rise, annual loss
Supply constraints and demand expectations in the automotive industry continue to determine platinum and palladium prices.
Quick Look
- While platinum and palladium, among the precious metals, are rising on a monthly basis, they continue to lose annually.
- While supply constraints support prices, the transition to electric vehicles suppresses long-term demand.
AI-generated summary
Why It Matters
Platinum and palladium production is concentrated in South Africa and Russia.
While platinum and palladium prices in the precious metals market are increasing on a monthly basis, they continue to lose annually. Supply constraints and demand expectations in the automotive industry determine the prices of the two metals.
PLATINUM IS AT THE LEVEL OF 1,536 DOLLARS
Platinum is trading at around $1,536 per ounce. The metal, which experienced a limited decline on a daily basis, increased by 8.63 percent monthly and lost 30.81 percent in value compared to the same period last year.
Platinum, which is used in catalytic converters in the automotive industry, jewelry production and the chemical industry, is followed closely due to the demand especially in diesel vehicles and hydrogen technologies.
The speed of the transition to electric vehicles also directly affects the expectations regarding platinum demand.
PALLADIUM IS OVER $1,000
Palladium is trading at around $1,036 per ounce. The metal, which recorded a limited decrease on a daily basis, increased by 10.03 percent on a monthly basis and decreased by 38.13 percent on an annual basis.
The price of palladium, which is mostly used in the catalytic converters of gasoline vehicles, is closely linked to automotive production and emission standards.
The change in gasoline vehicle production and the ability of manufacturers to switch between platinum and palladium are among the factors affecting the price difference between the two metals.
SUPPLY CONSTRAINTS SUPPORT PRICES
The concentration of platinum and palladium production in South Africa and Russia makes the supply of the two metals sensitive to global developments.
Production cuts, strikes and energy costs in mines increase the vulnerability on the supply side. This situation causes even limited increases in demand to cause rapid movements in prices.
TRANSITION TO ELECTRIC VEHICLES AFFECTS DEMAND EXPECTATIONS
The continuation of annual losses despite the monthly rise in platinum and palladium shows that the recovery in the market has not yet reached last year's price levels.
While supply constraints and demand in the automotive industry are among the factors supporting prices, the transition to electric vehicles and uncertainties regarding global growth suppress long-term demand expectations.
It is being closely monitored whether the short-term rise in the market will turn into a permanent recovery.
What to Watch
AI outlook — possibilities, not facts
It will be monitored whether the short-term rise will turn into a permanent recovery.
Possible · Within months
Open Questions
- Will the short-term rally turn into a permanent recovery?
- How will demand expectations in the automotive industry be shaped?
