Investing in Palladium

Palladium is a platinum group metal with many uses. It can absorb 900 times its own volume in hydrogen gas. White gold is a mix of gold with palladium.

Global palladium sales were 212,000 kg in 2009, about 5% less than those in 2008. About 45% of the total was used by the autocatalyst industry, about 19% by the electronics industry, and about 12% by the jewelry industry. The remaining amount was used in industries such as chemical, dental, investment, and others.

Domestic Production and Use: The Stillwater and East Boulder Mines in south-central Montana were the only primary platinum-group metals (PGMs) mines in the United States and were owned by one company. Small quantities of PGMs were also recovered as byproducts of copper refining. The leading demand sector for PGMs continued to be catalysts to decrease harmful emissions in both light- and heavy-duty vehicles. PGMs are also used in the chemical sector as catalysts for manufacturing bulk chemicals such as nitric acid and in the production of specialty silicones; in the petroleum refining sector; and in the fabrication of laboratory equipment. In the electronics sector, PGMs are used in computer hard disks, multilayer ceramic capacitors, and hybridized integrated circuits. PGMs are used by the glass manufacturing sector in the production of fiberglass, liquid crystal displays, and flat-panel displays. Platinum alloys, in cast or wrought form, are commonly used for jewelry. Platinum, palladium, and a variety of complex gold-silver-copper alloys are used as dental restorative materials. Platinum and palladium are used as investment tools in the form of exchange traded notes and exchange traded funds.

Events, Trends, and Issues: Prices of platinum, palladium, and rhodium trended higher during the first quarter of 2010, decreased in the middle of the year, and increased once again toward yearend. The price of iridium increased strongly in the first few months and stayed at that high level throughout the rest of the year, its highest level since 1981. Ruthenium prices increased toward the middle of the year, then decreased. The slowly recovering global economy in 2010, compared with the poor economic conditions of 2009 and late 2008, affected the PGM industry. Some mines that had been previously placed on care-and-maintenance status were reopened in response to higher metal prices. Production of and demand for automobiles was higher throughout much of the world, particularly in developing nations such as China and India. This led to increased PGM demand in some regions because catalytic converters are the major end use of PGMs. The proportion of diesel cars in Western Europe, which use platinum in their catalytic converters, returned to around 50% after having dipped to 42% in 2009 as a result of Government scrappage plans. Those plans had led to increased purchases of smaller, more fuel-efficient gasoline-powered cars.

Compared with consumption in 2009, consumption of PGMs for industrial uses in the chemical and petroleum sectors increased. In contrast, consumption in the jewelry sector was lower in 2010 as a result of higher prices. Consumption in the jewelry sector can be expected to follow price trends for platinum. The United Kingdom mandated the hallmarking of all palladium jewelry, and future jewelry use for palladium may increase as that metal becomes more recognized and desired.

An increase in car sales in Europe and North America can be expected to result in an increase in use of platinum and palladium in these regions. The large price differential between platinum and palladium has led to the assumption that automobile manufacturers will continue to change PGMs ratios in gasoline-engine vehicles in favor of palladium, as well as continue efforts to increase the proportion of palladium used in diesel vehicles. Research is likely to continue on fuel cells for automobiles, including research on the use of palladium rather than more expensive platinum in the catalysts. Investor interest in exchange-traded notes and funds is expected to continue to rise.

World Resources: World resources of PGMs in mineral concentrations that can be mined economically are estimated to total more than 100 million kilograms. The largest reserves are in the Bushveld Complex in South Africa.

Substitutes: Many motor vehicle manufacturers have substituted palladium for the more expensive platinum in gasoline-engine catalytic converters. Until recently, only platinum could be used in diesel catalytic converters; however, new technologies allow as much as 25% palladium to be used, and laboratory experiments have increased that proportion to around 50%. For other end uses, PGMs can be substituted for other PGMs, with some losses in efficiency.

Palladium Producers
Norilsk Nickel (OTC: NILSY) - - Palladium powder and ingots
North American Palladium (NYSE: PAL) - - Canada's largest producer of palladium, they operate the Lac des Iles palladium mine near Thunder Bay, Ontario, Canada.
Stillwater Mining (NYSE: SWC) - - Major North American palladium miner located in Montana.
Platinum Group Metals (AMEX: PLG)

Palladium price chart -

(wiki) - Palladium on Wikipedia

(wiki) - Palladium as an investment

Palladium News
2011-07-26 - (kit) - Palladium hits highest level since February; platinum also rises
2011-07-23 - (co) - Platinum surplus to rise, Palladium prices to gain in 2011
2011-07-08 - (ts) - Pedal to the (not-so-heavy) metal
2011-06-29 - (sa) - Investors flocking to palladium, platinum ETFs
2011-06-22 - (sa) - The ultimate guide to palladium investing
2011-06-21 - (cn) - American palldium eagle study phase to begin
2011-06-15 - (rin) - Palladium instead of platinum: An auto trend headed for trouble?
2011-06-15 - (pr) - Pan American Metals of Miami advises investors not to overlook palladium
2011-06-14 - (pla) - Auto sector recovery to drive investor interest in palladium: Macquarie
2011-06-13 - (mw) - North American palladium updates palladium mineral resources
2011-06-12 - (far) - Iranian researchers use eco-friendly method to synthesize palladium nanoparticles
2011-06-08 - (sa) - Popular and precious: A palladium primer
2011-04-04 - (isa) - North American Palladium: triple digit gains?
2010-11-21 - (mdf) - Auto sales drive palladium prices
2010-11-12 - (co) - Now, palladium coins to flood markets?
2010-11-10 - (mw) - North American Palladium reports return to profitability in third quarter
2010-11-09 - (bi) - This is why palladium might be the new gold
2010-11-01 - (fn) - Iranian scientists synthesize reusable palladium nanocatalyst
2010-10-28 - (ri) - Investors see potential for palladium over $1,000/oz again
2010-09-22 - (loc) - H.R. 6166 - American Eagle Palladium Bullion Coin Act of 2010
2010-06-01 - (ts) - How to invest in palladium
2010-02-01 - (sa) - Palladium: the bullish case now looks even stronger
2010-01-20 - (sui) - How and why to buy and invest in palladium: acquire coins, bullion, mining stock, futures, exchange traded funds

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