PALDF (OTC Pink): $ 3.79 +0.06 +1.61% Volume: 1,297 October 26, 2016
PDL (TSX): $ 5.05 +0.09 +1.81% Volume: 3,387 October 26, 2016
PALLADIUM: $ 634.50 -0.50 -0.08% Volume: October 26, 2016
PLATINUM: $ 963.00 +23.00 +2.45% Volume: October 26, 2016

Palladium FAQ

1. Where are the largest PGM deposits in the world?

The largest PGM deposits based on published resources are found in South Africa and Russia.  Most of South Africa’s PGM resources occur in the Bushveld Complex where platinum, palladium, rhodium and minor quantities of the refractory PGM (osmium, iridium and ruthenium) are extracted from two narrow (~1m thick) platinum-enriched ‘reef-type’ deposits – the UG2 and Merensky reefs, and the much thicker Platreef deposit, which is considered the most analogous of the world’s primary PGM sources to the Lac des Iles Roby and Offset zones in terms of geology, thickness and average PGM grades.  Russian PGM production is principally sourced from the Norilsk-Talnakh mining district in Siberia where palladium is an important by-product of the world-class nickel and copper sulfide mining operations.  NAP’s Lac des Iles mine and Stillwater Mining’s Stillwater and East Boulder mines are the only primary palladium mining operations in the world.

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2. What are the primary uses and applications for palladium?

The manufacture of catalytic converters continues to be the primary use for palladium, with its consumption accounting for approximately 66% of forecast global demand in 2015 (CPM Group Platinum Group Metals Yearbook, 2015). Other major sources include: electronics (14%), dental (8%), jewellery (5%), petrochemical refining (5%) and a range of other, minor industrial applications (2%).

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3. What are the common properties of PGMs?

Palladium is one of the six platinum group metals (PGMs), consisting of: platinum, palladium, osmium, ruthenium, iridium and rhodium. Of the six, palladium has the lowest melting point and is the least dense.

PGMs are known for their:

  • Strength and durability

  • Strong catalytic properties

  • Resistance to oxidation and corrosion

  • Conductivity and ductility

  • High melting point

  • Geological scarcity (much rarer than gold)

PGMs are most commonly used for technological advances in the fields of autocatalysts, power generation, alternative fuel sources, transportation, electronics and healthcare. Growing and anticipated future applications for palladium include fuel cells, hydrogen gas generation from natural gas, nano technology and super-capacity hard drives.

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4. What are catalytic converters?

Catalytic converters are incorporated into the exhaust system of most vehicles that burn fossil-fuels. They are used to reduce the toxic emissions that result from an internal combustion engine by converting harmful pollutants into less harmful emissions. Thin films of palladium in auto catalysts promote the following harmful emission-reducing reactions:

    • carbon monoxide + oxygen → carbon dioxide

    • methane and other hydrocarbons + oxygen → carbon dioxide and water

    • carbon monoxide + nitrous oxide → carbon dioxide + nitrogen

Auto catalysts reduce tailpipe emissions of carbon monoxide and high potency greenhouse gases (hydrocarbons and nitrous oxide).  Palladium is commonly used in combination with smaller quantities of rhodium with loadings in the 3-5 grams per vehicle.


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5. How do the different engine types impact the use of palladium in catalytic converters?

  • Gasoline engines: use more than 90% palladium in catalytic converters.
  • Diesel engines: historically used platinum due to technical requirements, however now use approximately 30% palladium, with a scope to increase to 50% due to the introduction of low sulphur diesel fuel.
  • Hybrids & other new power forms: expected to account for <1% of global cars sales1 in 2015 with a recent decline in popularity noted in the 2015 sale figures for most hybrid vehicle manufacturers.  Expected to have a neutral impact on PGM use as gasoline hybrids tend to use as much palladium as normal gasoline engines.
  • Electric: forecast to account for <1% of global car sales in 2015; have no requirement for catalytic converters therefore would have a negative impact on PGM use. Given their current challenges (lack of infrastructure to recharge, high costs, long charging periods and short driving range) and the recent decline in global oil prices, electric vehicles are not expected to be major threats to fabrication demand in the next decade.

1. U.S. Department of Transportation

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6. What are the current trends in palladium consumption for jewellery?

China remains the largest consumer of platinum and palladium jewellery. Palladium jewellery was introduced to China in 2004 in the form of Pd950 (95% palladium) and in 2005 in the higher purity Pd990 (almost pure palladium) opening up a brand new market. Its lower cost compared to platinum, has made palladium more accessible to more consumers.  Most Chinese manufacturers now have the technical ability to work with palladium and combined with low palladium lease rates, benefit from the greater margins from the metal.  Recent price-driven declines in palladium (and platinum) demand for jewellery in China and globally have been more than offset by increased demand in the auto catalyst manufacturing sector (see CPM Group Platinum Group Metals Yearbook, 2015).

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7. What is the impact of the palladium ETFs?

Palladium exchange traded funds (ETFs), which have only been around since 2007, have significantly contributed to the increased investor interest in palladium. These ETFs are now trading in Zurich, London, Japan, Johannesburg and New York. Global ETFs’ holdings recently peaked at approximately 3 million ounces of palladium in physical form although recent outflows have reduced this amount to approximately 2.4 million ounces.  Looking ahead and assuming a balance between industrial demand and primary and scrap/secondary supply, major changes in global ETF holdings are likely to play an increased role in determining palladium prices in the future.

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8. What are the price forecasts for palladium?

Despite recent, steep declines in the global average price of virtually all industrial commodities, including palladium, most PGM market analysts remain bullish on the medium and long-term palladium price based on the expected continuation of strong supply and demand fundamentals and a resumption in palladium ETF investment. 

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9. What are the forecasts for global vehicle production?

Credible forecasters such as IHS Automotive predict that global light vehicle production will be in the range of 90 million units in 2015, rising to 100 million units by 2020. Automotive sales are returning to their historical norms in mature economies, especially in the United States, and are on the rise in China – which is expected to account for 50% of the forecast 15% growth in light vehicle sales from 2014 to 2020.

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10. How do the Russian stockpiles affect the palladium market?

There has been considerable speculation about the current holdings of the Russian government’s stockpiles that were accumulated in the 1970’s and 1980’s. While this remains a State secret, a number of public statements were made by PGE market forecasters indicating that the Russian government palladium stockpile has declined to relatively low levels.  However, in the early part of 2015 Norilsk Nickel announced a provisional arrangement with the Russian Government to purchase up to US $2 billion of palladium from the government’s stockpiles, potentially before the end of the year.  However, this purchase agreement was based on a larger palladium supply deficit and (likely) higher palladium prices than existed at the end of 2015 and it remains to be seen to what extent Norilsk Nickel pursues this purchase agreement.

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