Palladium Prices Dived Over Looming Global Economic Conditions; Is The Metal Losing The Fizz?

  • Apr 11, 2019 AEST
  • Team Kalkine
Palladium Prices Dived Over Looming Global Economic Conditions; Is The Metal Losing The Fizz?

Palladium prices plunged after a steep rise, with Palladium futures (NYMEX) rising initially from the level of $815.20 (day’s low on 16th August 2018) to the level of $1397.40 (Day’s high on 17th January 2019). The up-rally valued the palladium more expensive than the gold. After initially rising to the level of $1397.40, the prices plunged and corrected slightly to reach the level of $1269.10 (day’s low on 25th January 2019).

The prices again started its upside movement from the level to $1296.10 and reached the top level of $1576.60 (day’s high on 21st March 2019). The factor which supported the high prices was the high demand from China due to its interest in the fuel cell technology, where palladium is used as a catalyst for controlling the emissions.

The rapid electrification process of the transportation industry marked rise in electric vehicle segment, which demonstrated a loophole. The loophole in the electric vehicle was the less distance coverage in heavy transportation; which in turn, prompted significant economies such as China to work on the hydrogen fuel cell technology. The hydrogen fuel cell technology marked an infusion of the electric battery along with the fuel cells.

The Hybrid cell uses the traditional oil as an energy source in it along with electric battery and as per the research conducted and published time after time, it provides long distance coverage in heavy transport vehicle, which in turn, increased the demand for palladium as palladium is used in these hybrid fuel cells to covert the harmful gas emission. The high demand from the emerging technology pushed the prices and palladium became more expensive than gold.

However, in the recent scenario, the prices dropped from the recent high of $1576.60 to the present level of $1350. The Factor which has exerted the pressure on the palladium prices is the pressure on the global economy, which marked a diminishing activity in almost every segment. The previous and current forecast of the International Monetary Fund for the world economic growth exerted further pressure on the palladium prices.

The primary contributor to the recent fall in the palladium prices was the increased stance in global economies to curb the harmful emission in line with Euro- 6 standards. The global economic slowdown marked a decline in automotive sales across China and Europe, which, in turn, exerted the pressure on palladium prices.

However, the fall in the palladium prices is minor as compared to the rally, which the commodity started from the level of approx. $800. The high upside in the commodity was also because of its limited presence in the environment, which gives palladium a title of the precious metal.

The prices of palladium recently plunged from the level of its current high of $1412.70 (day’s high on 3rd April) to mark a recent low of $1295.50 (day’s low on 5th April). The palladium prices are currently hovering around $1348.


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