Bloomberg: Palladium Will Drop Due to Automakers Switching to Platinum

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Palladium demand is poised to drop as the metal’s highest price to platinum in almost 12 years cuts use from carmakers, according to SP Angel Corporate Finance LLP.

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Auto companies, the biggest buyers, cut consumption of palladium by 40 percent in 2002 after prices climbed to a record in 2001 and used more platinum, according to Johnson Matthey Plc. Both metals are used in catalytic converters to curb harmful emissions the report from Bloomberg News said.

“There will come a point where if palladium prices move up much closer to platinum prices then car companies might move to using a bit more platinum again, rather than palladium,” John Meyer, an analyst at SP Angel in London, told Bloomberg. “Price changes will have a shorter-term impact on purchasing, as in companies and traders maintaining stock levels. It does take a while for fundamental consumption to change.”

On Tuesday, July 29, the day’s biggest mover was Indian silver, which saw a 2.1 percent decline to INR 44,281 ($737.28) per kilogram. After a 0.9 percent increase, Japanese silver finished the day at JPY 670.00 ($6.58) per 10 grams. The price of US silver declined 0.9 percent to $20.57 per ounce. Chinese silver held its value yesterday at CNY 4,315 ($697.37) per kilogram.

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Japanese gold bullion saw its price rise 0.9 percent to JPY 4,272 ($41.95) per gram. At $1,304 per ounce, US gold bullion fell 0.4 percent on Tuesday. The price of Indian gold bullion fell 0.4 percent to INR 27,938 ($465.17) per 10 grams. Chinese gold bullion prices rose 0.2 percent to CNY 260.08 ($42.03) per gram.

The price of Japanese platinum bar increased 1.0 percent to JPY 4,857 ($47.70) per gram. Chinese platinum bar prices inched up 0.3 percent to CNY 313.00 ($50.59) per gram. The price of US platinum bar remained steady at $1,474 per ounce.

The price of Japanese palladium bar increased 0.9 percent to JPY 2,902 ($28.50) per gram. After a 0.5 percent increase, Chinese palladium bar finished the day at CNY 194.00 ($31.35) per gram. US palladium bar stayed flat at around $877.00 per ounce.

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