With stricter automotive emission legislation being enforced globally, and technological advancements for palladium’s use in diesel catalytic converters, palladium’s role in the auto industry is believed to play a significant role in the future.

PALLADIUM DEMAND by APPLICATION
Total in 2007: 7.96 million ozs

PALLADIUM & PLATINUM AUTO DEMAND FORECAST
1991 – 2017p

Source: CPM Group August 2008

Autocatalyst palladium demand is projected by CPM Group to remain level at about 4.2 M ozs in 2008 vs. 2007. The concerted global effort towards the reduction of harmful emissions has resulted in tightening legislation requiring the increasing mandatory usage of catalytic converters.  Palladium is especially beneficial in the three-way catalytic converter (“three-way” refers to the three regulated emissions it helps to reduce – carbon monoxide, VOCs and NOx molecules) in the reduction and elimination of these carbons, as palladium can tolerate higher temperatures than platinum. Platinum, on the other hand, is viewed as better suited for diesel engines that operate at lower temperatures than gasoline engines.

With palladium trading at a significant discount to platinum, there is substantial economic incentive for auto makers to switch from platinum to palladium in many three-way catalysts. The introduction of Euro IV legislation in January 2006 has resulted in some increased palladium loadings per gasoline vehicle. Some of this growth is due to the introduction of the first diesel catalysts using palladium alongside platinum. Further use of this technology is expected in future years.

CPM Group - Palladium and the Automotive Industry

The use of palladium has risen and it could account for as much as a quarter of diesel auto catalysts. The engine technology and the relative prices of the various PGMs are among the factors that guide the proportion of PGMs that an auto catalyst manufacturer may use.

"The tightening emmissions standards globally have been one of the main drivers behind the increased use of PGMs in auto catalysts."

Source: CPM Group Platinum Group Metals Yearbook 2008 (p.122)

The electronics sector is expanding and previously seen substitution of base metals for palladium in multi-layer ceramic capacitors is slowing. Rising sales of electronic products are boosting metal consumption which is likely to continue. The outlook for demand continues to improve in this sector as substitution for palladium diminishes.   

Palladium is used in a number of electronic applications. The multi-layer ceramic capacitor is a component that helps to control the flow of an electric current through the various parts of a circuit by storing a charge of electricity until it is required. It consists of layers of conductive electrode material (usually palladium or palladium-silver) sandwiched between insulating ceramic wafers. Demand for the device represents over half of all palladium consumption in electronics which rose to over 1 million ozs in 2007. Palladium is also used in the manufacture of cell phones and flat screen TVs.

Palladium Demand: Electronics (CPM Group Yearbook 2008) ’000 ozs
	2006	2007
Europe	220	225
Japan	275	260
North America	300	320
Rest of the World	240	260
Total	1,035	1,065

Mobile phone sales have been as expansive as their variety. Other usages in electronics include plating connectors and lead frames, conductive tracks in hybrid integrated circuits and a variety of military hardware applications. 

Palladium-based alloys in the Dental sector are used for dental crowns and bridges. Since the 1980s, palladium has been used from time to time in place of gold as a lower-cost alternative.  Palladium is usually mixed with gold or silver as well as copper and zinc in varying ratios to produce alloys suitable for dental inlays, crowns and bridges. Small amounts of ruthenium or iridium are sometimes added. The most common application is in crowns, where the alloy forms the core onto which porcelain is bonded to build up an artificial tooth.

Palladium for use in dentistry is expected to be even in 2007 (CPM Group Yearbook 2008 - p. 120-1).

Palladium Demand: Dental (CPM Group Yearbook 2008) ’000 ozs
	2006	2007
Europe	235	240
Japan	270	268
North America	235	240
Rest of the World	25	26
Total	765	774

Palladium jewellery was introduced to China in 2004 in the form of Pd950 (95% palladium) and in the year following in the higher purity Pd990 (almost pure palladium) opening up a brand new market and popularity for palladium in jewellery. Its lower cost, compared to platinum, has made it more accessible to consumers outside major Chinese urban centres. Most Chinese manufacturers now have the technical ability to work with palladium and are producing jewellery from it as well as from platinum. Combined with low palladium lease rates, palladium offers relatively inexpensive financing and greater margins for retailers.