Palladium is one of a group of six metals known as Platinum Group Metals or PGMs.

 

The others are

 

    *       Platinum
    *       Iridium
    *       Rhodium
    *       Ruthenium
    *       Osmium.

 

Palladian is more rare than platinum which is 15 times rarer than gold.

 

All the platinum ever mined will fit into a 25 cubic foot room.

 

Both Platinum and Palladium have very high melting points and both are effective catalysts in chemical reactions.

 

Palladium can tolerate more heat than Platinum and that has some added importance to the auto industry.

 

In 2005 approximately 40% of total Platinum demand and approximately 58% of Palladium demand came from the worldwide motor industry.

 

Both are used in catalytic converters to reduce auto emissions to meet increasing clean air standards.

 

As both metals can be used in catalytic converters more or less as effectively as each other, auto manufacturers will use whichever metal is cheapest.

 

The downside being the time taken to retool when switching from one metal to the other.

 

In 2001 Palladium reached a high of US$ 1090.00 an ounce while Platinum was trading at circa $620 an ounce.

 

Also in 2000-2001 the Ford Motor Co. stockpiled 1,800,000 ounces of Palladium.

 

This created a price bubble which eventually cost Ford nearly $US1 billion.

 

Other auto manufacturers retooled to use Platinum and as the demand went up so did the price whilst the price of Palladium dropped to as low as $184.00 an ounce as demand slackened.

 

It is understood that Fords’ stockpile of Palladium is now early exhausted so this drag on the market is likely to lift any time soon.

 

The latest designs call for the catalytic converter to be located nearer the engine and that will suit the higher tolerance that Palladium has to heat.

 

The two largest producers of Palladium are Russia, which accounts for circa 50%, and South Africa and both have kept the market fully supplied for several years.

 

As the US dollar declines and Russia continues to grow wealthier and less dependant on overseas earnings, and in particular dollar earnings, so the temptation to restrict supplies to push up the price will become greater.

 Source: http://platinum.preciousmetalinvestment.com/9/what-is-palladium/