Commodities : Palladium
Palladium demand :
The Palladium is part of the precious metals category. It has several uses:
- 1. Catalytic converters: The Palladium is used in the manufacture of catalytic converters.
- Electrical and electronic sectors: Palladium is mainly used for production of electrical components for cell phones.
- Dental Sector: Palladium is widely used in dental alloys.
- Jewelry: Palladium is used in the manufacture of watches and jewelry making.
- Chemical industry: the palladium in the manufacture of synthetic fibers.
The allocation of the demand in 2006 for a total of approximately 7,000 thousand ounces.
Palladium supply :
Now take a look to the production. Here is the geographical allocation of production of palladium in the world, for a total production of approximately 8,500 thousand ounces.
We can also take a look to the evolution of the supply and demand that shows that the palladium is commodity less and less use since 2000, and this is due to the less important use in the automobile sector which uses more platinum.
Palladium Evolution :
The palladium price is dictated by the law of supply and demand. However, unlike other metals, palladium supply is very limited. This makes the palladium price very volatile. To predict its evolution, several key numbers are important such as country policies largest producers (South Africa and the Russian Federation), the stocks of States and the economic situation of most important consumers such as Japan, the United States and Europe.
Increasingly, consumers not rely on organized market. They deal directly with producers in the world, establishing contract agreement. Thus, it is largely that Russia plays a key role in price formation, being the largest producer.
The Palladium is quoted in ounce in U.S. dollars. The evolution of the price is correlated with the dollar. There price of palladium is rising when the dollar is falling. This is called negative correlation between the dollar and the palladium, which is illustrated perfectly with these two charts of the EUR / USD and palladium.