Definition of palladium

What is palladium?

Palladium is a shiny silver metal that is used in many types of manufacturing processes, especially for electronic and industrial products. It can also be used in dentistry, medicine, chemical applications, jewelry, and groundwater treatment. Most of the world’s supply of this rare metal, which has atomic number 46 on the periodic table of elements, comes from mines located in the United States, Russia, South Africa and Canada.

Key takeaways

  • Palladium is a shiny metal that is used in many electronic and industrial products.
  • Along with platinum, rhodium, ruthenium, iridium, and osmium, the metal is part of a group known as platinum group metals.
  • Most of the world’s palladium supply comes from Russia, South Africa, the United States, and Canada.
  • Compared to gold, the metal is 30 times rarer.
  • Palladium can be rolled into sheets, which are then used in applications such as fuel cells and solar power.

Understanding palladium

Palladium is an important component in electronics and is used in many new technologies, such as fuel cells. As a raw material, it has attracted the attention of investors because it is not easy to substitute for other metals. For example, the element is an important component of catalytic converters. Palladium, platinum, rhodium, ruthenium, iridium, and osmium form a group of elements called platinum group metals (PGMs).

Palladium is 30 times rarer than gold. This rarity affects its price in the commodity markets and the metal reached all-time highs of more than $ 2,894 in May 2021. The all-time low of $ 42.20 was set in August 1977.

In 2020, humans extracted more than 210 metric tons of palladium. Russia produced the most at 91 metric tons. South Africa ranked second with 70 metric tons and Canada ranked third with 20 metric tons. The United States produced 14 metric tons and Zimbabwe produced 12 metric tons.

The price of palladium ranged between $ 100 and $ 150 per ounce from 1986 to 1996 before rising in 2001. Historically, the price of palladium was more volatile from 2001 to 2016 compared to previous periods. Then it started to rise steadily and surpassed the $ 1,500 mark in February 2019.

Palladium history

William Hyde Wollaston discovered palladium in 1802. It was an accidental discovery when he dissolved platinum in a mixture of nitric acid and hydrochloric acid. Wollaston named the debris he found after the asteroid, Pallas. He did not announce his lucky discovery to the world, but instead sold it privately, marketing it as the next silver.

Other scientists noticed and revealed palladium for what it was, another alloy and not the next silver. Wollaston later revealed his discovery to the Royal Society of London. As it became popular, palladium was used in the treatment of tuberculosis, but it had too many undesirable side effects and its use in the treatment of the disease was discontinued.

Palladium began to be used in jewelry in 1939, but it wasn’t until the late 1980s that palladium grew in popularity. It began to be used in catalytic converters and is used today in a wide range of products and industries, including dentistry, watchmaking, computers, photography, electronics, and hydrogen purification.

Palladium benefits

Jewelers first incorporated palladium into jewelry in 1939. When mixed with yellow gold, the alloy forms a stronger metal than white gold. In 1967, the government of Tonga issued circulating palladium coins promoting the coronation of King Taufa Ahau Tupou IV. This is the first recorded case of palladium used in minting.

Palladium is more durable and harder than gold and is also more expensive per ounce.

Metal workers can create thin sheets of palladium up to two hundred and fifty thousandths of an inch. Pure palladium is malleable, but it becomes stronger and harder once someone works with the metal at room temperature. The foils are then used in applications such as solar energy and fuel cells.

Palladium’s largest industrial use is in catalytic converters because the metal serves as a great catalyst that speeds up chemical reactions. This shiny metal is 12.6% harder than platinum, making the element more durable than platinum as well.

How to invest in palladium

Investors can be exposed to palladium in a number of ways. One of the easiest ways to do this is to invest in palladium-focused exchange-traded funds (ETFs) that track palladium bullion, such as Sprott Physical Platinum and Palladium Trust (SPPP) or Aberdeen Physical Palladium Shares (PALL). These ETFs contain physical palladium, which provides the benefit of not having to store the metal itself, but still be exposed to its value.

The opposite way to invest in palladium than ETFs is to buy physical bullion itself. With this comes the storage cost of having to store the physical metal.

Another option for investing in palladium is to buy shares of companies involved in the palladium business, usually its extraction and sale. In this case, it can be difficult to focus on just palladium, as mining companies often extract a multitude of metals rather than just one, so you will be exposed to more metals than just palladium.

What is palladium used for?

Palladium is used in catalytic converters for automobiles, in fuel cells to generate power, in jewelry, dental fillings and electronic components. Catalytic converters convert toxic car gases into less harmful substances.

How much palladium is in a catalytic converter?

The amount of palladium in a catalytic converter depends on the size of the converter, which depends on the type of car. However, in general, two to seven grams of palladium are used in a catalytic converter.

How much is palladium worth?

As of October 2021, the price of palladium is just over $ 2,000 per ounce, making it more expensive than gold. The price of palladium has risen steadily since the mid-1990s, except for a drop in 2001 and 2008.

The bottom line

Palladium is a metal found primarily in Russia, South Africa, and Canada. It is stronger than platinum and has a wide range of uses, from dentistry to automotive, manufacturing, and electronics. The price of palladium has risen significantly since its widespread use in the 1990s. Investing in palladium can be done by purchasing it physically, as well as through ETFs.

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Mark Holland

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