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| Palladium |
| Despite a 2% increase in palladium demand in 2007, the
market was in surplus for the seventh consecutive year.
Demand increased with the continuing move away
from platinum into palladium in gasoline emissioncontrol
technology, some growth in the electronics sector and significant offtake in investment. Supplies of
palladium increased because of higher shipments from
Russia and increased output from North America and
other producers. |
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| AUTOCATALYST |
 Gross demand for palladium from the autocatalyst
sector increased by 8% to 4.4 million ounces, buoyed by
increased vehicle production and the continuing
replacement of platinum with palladium where possible.
In Europe, purchases of palladium rose marginally to
895,000 ounces due to the increasing use of palladium
in diesel catalyst systems. Palladium use in autocatalysts
in Japan rose by 6% in 2007 as the move to switch out
of platinum in favour of palladium accelerated.
An increase in production of vehicles destined for
export markets also contributed to the rise in demand.
In North America, an expected decline in vehicle
production failed to dampen demand for palladium.
Replacement of platinum with palladium and tightening
emission legislation necessitated a 12% increase in
purchases of palladium to 1.64 million ounces. Rapid
economic growth in China is underpinning double-digit
growth in automobile sales. Despite a delay in the
implementation of Euro III equivalent emission standards,
demand for palladium from this source is estimated to
have increased by 23% to 270,000 ounces. The delay of
the new emission limits does not seem to have affected
the fitment of catalysts to vehicles. |
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| ELECTRICAL |
| As with platinum, strong growth in computer sales is
driving electronic demand for palladium. In the multilayer
ceramic capacitors (MLCC) segment, most manufacturers
have embarked on miniaturisation programmes which
have reduced the amount of palladium per item.
However, the high level of demand made up for this and
demand for palladium in this application was maintained
at 2006 levels. The high price differential between
palladium and gold has boosted demand for palladium
for connectors while lead-free legislation in Europe and
Japan is increasing the use of palladium in lead frames.
Overall demand for palladium in the electronics sector
is estimated to have increased by almost 4% to
1.1 million ounces. |
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| DENTAL |
| Palladium demand in dentistry remained level with 2006 at 620,000 ounces, with the lower price encouraging use in North America and Japan. Palladium and, to a lesser extent, platinum are alloyed with other metals for use in dental restorations, such as crowns. Highgold alloys usually contain platinum while low-gold alloys contain 50 – 80% palladium. In Japan the government specifies the alloy used for subsidised dental work. The alloy, kinpala, contains 20% palladium. Palladium demand increased slightly in North America encouraged by the price differential between gold and palladium. In Europe, however, demand continues to decline with a move to greater use of resin and ceramic systems. |
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| Palladium supply and
demand |
| (000 oz) |
2007 |
2006 |
| Supply |
|
|
| South Africa |
2,795 |
2,905 |
| Russia |
4.240 |
3,900 |
| North America |
1,000 |
985 |
| Others |
285 |
270 |
| Total supply |
8,320 |
8,060 |
| Demand |
|
|
| Autocatalyst: |
|
|
| gross |
4,380 |
4,040 |
| recovery |
(945) |
(800) |
| Dental |
620 |
620 |
| Electronics |
1,100 |
1,060 |
| Jewellery |
745 |
995 |
| Other (including chemical) |
705 |
555 |
| Total demand |
6,605 |
6,470 |
| Movements in stocks |
1,715 |
1,590 |
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| INVESTMENT |
| Demand for physical palladium
investment products increased
rapidly in 2007 to an estimated 250,000 ounces. Most
of this was purchases made for ETFs which made up for
weak demand for bars and coins. |
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| CHEMICAL |
Palladium offtake in the chemical sector declined by
70,000 ounces in 2007. Demand was boosted in 2006
with construction of new production capacity of
purified terephthalic acid. Palladium is used in catchment
gauze in the nitric acid industry to recover the platinum
and rhodium lost in the process. With prices of
platinum and rhodium high, there has been increased
demand for these catchment gauzes. Palladium is also
used as a catalyst in the environmentally acceptable
method of producing hydrogen.
Consumption of palladium in other applications
increased by 10% in 2007 on account of a growth in
pollution control and petroleum refining. Palladium is
finding a growing use in medical devices, such as antimicrobial
coatings applied to catheters. |
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| JEWELLERY |
| Palladium jewellery was introduced in 2004 in China
and demand, essentially for retail stock, increased rapidly
in 2005. Demand declined in 2006 as Pd950 jewellery
was returned for refining, reducing fabricator demand
for new metal. Interest in palladium jewellery has spread
to other regions. Significant recycling continued in 2007,
further reducing demand by 30% to 500,000 ounces. |
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