What Awaits Palladium Prices in 2023 After Last Year’s Turbulence
Palladium prices reached an all-time intraday high of $3,339 per ounce in 2022, but experienced widespread volatility throughout the year, with prices falling to a year-to-date low of $1,657 per ounce.
The precious metal began the year at $1,840 per ounce, but saw an 81% rally between January and March due to Russia’s invasion of Ukraine and uncertainty in global markets. Russia is the world's second-largest palladium producer and accounted for 28% of primary and secondary palladium supply in 2021.
However, supply disruptions from other regions, weak auto demand and central bank commitments to quashing inflation also contributed to the metal's price fluctuations throughout the year.
The palladium market briefly moved into excess in 2021, but is expected to shift back to a significant deficit in 2022, as supply is weaker than demand.
Palladium demand has yet to recover to its 2019 pre-pandemic level of 11.4 million ounces, and high prices and substitution in the auto sector have further affected demand for the metal.
Who: Nordic Nickel, BHP, Palladium market players and experts like Wilma Swarts, Director of Platinum-Group Metals at Metals Focus
Why it matters:
Palladium is a precious metal that is widely used in the automotive industry, particularly in catalytic converters. The volatility in palladium prices in 2022, caused by a combination of supply disruptions, weak auto demand, central bank actions and geopolitical events, could have major implications for the industry and investors in the precious metal. It also highlights the challenges faced by palladium market participants to navigate a complex and dynamic environment and the need to be agile and adaptive to changing conditions.
