Palladium Prices Surge 30%

Surging demand for palladium used in automotive catalytic converters to cut exhaust emissions has pushed the price of the noble metal up 30% to a record $1,700 per ounce this year.

That price is more than three times the average for palladium over the past 25 years. Analysts say consumption is up in spite of sagging vehicle sales in large part because carmakers are buying up supplies ahead of tougher emission limits that take effect next year in China, the world’s largest national market.

Prices also are climbing because stockpiles of palladium are relatively low. Experts say continued high prices may cause carmakers to switch the metal they use in catalytic converters to platinum, a sister catalytic metal which costs roughly half as much as palladium.

Automakers have occasionally shifted back and forth between the two precious metals to cut costs since carmakers began using converters to clean up exhaust gases more than 40 years ago.