Platinum, Palladium Best Performing Metals in 2010


". . .in euros, platinum is only 14% below its 2008 peak and palladium is above it."

The PGMs stand out as by far the best price-performing metals this year. Fixing on 14 April at $1,728/oz for platinum and $545/oz for palladium; in 2009, they had gained 18% and 39%, respectively. Compare those gains with that of gold (7%), silver (9%) and a basket of base metals, the LME index (8%).

Both platinum and palladium remain below their 2008 highs—platinum is 12% below its peak of $2,273/oz, but palladium just 6% off its peak of $582/oz (both on 4 March 2008). But when one considers the USD was far weaker back then than it is now (10% on its index, 11% against the euro), their recent price performance seems even more impressive—in euros, platinum is only 14% below its 2008 peak and palladium is above it.

The 2008 highs were reached during an extraordinary power crisis in South Africa, which saw many mines temporarily closed. This time around the soaring prices seem based on strong demand, or at least recovering demand and the expectation of strong demand.

It is palladium which has seen the largest gains, and the key factor is, as usual, the two major car markets—the U.S. and China. Both are primarily gasoline-engine markets (diesel tends to be used mainly for commercial vehicles), which means almost entirely palladium catalysts. China's boom is well known; sales rose from a monthly average of 331,135 in 2005 to 864,550 in 2009. For palladium this boom was intensified by increasingly strict emissions standards. However, looking globally, this boom was offset by the collapse in U.S. car sales—over the same period going from a monthly average of 1.4m in 2005 to just 861,410 in 2009.

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