Palladium dips below $1,000 for first time since 2018 as auto sector demand slows

Palladium prices (XPDUSD:CUR) fell below $1,000/oz Thursday for the first time in five years, falling to as low as $991.53 and capping a ~10% slide this week on concerns about a slowing global economy.

ETFs: (NYSEARCA:PALL), (NYSEARCA:PPLT), (SPPP), (PLTM)

The metal used for catalytic converters in cars enjoyed a sustained run higher from 2018 to a peak in 2021, but demand has been slipping as consumers buy more electric cars, leaving palladium has been on a long and winding road lower.

The ratio between copper – which is used more in electric vehicles than in internal combustion vehicles – and palladium has been rising since March 2020 and surged in the past week, Bloomberg reported.

“In the near term, supply curtailments have not materialized and demand has been weaker than expected following the UAW strike action,” Standard Chartered analyst Suki Cooper told Reuters, adding that large short positions have exacerbated the downside risk for palladium.