New environmental regulations and the trend towards electromobility are likely to boost demand for palladium. In addition, there is a chronic deficit in the palladium market. The palladium price has already recovered from the interim low on March 18, 2020 by 33 percent, explains Louvet. Quotations immediately jumped on the interest rate cuts by the Federal Reserve and the fiscal packages, said the commodities expert.
Auto emissions standards are driving demand
“The palladium market has been in deficit for nine years. The futures curve is therefore in backwardation, ”explains Louvet. And new mine capacities will not go online in the next three to four years. The Corona crisis has exacerbated the problem: projects have been postponed.At the same time, demand should pick up. The two most populous countries in the world, China and India, are tightening their car emissions standards. The emission standards “China 6” and “Bharat Stage VI” should stimulate the need for metals for the production of catalysts. In terms of price, palladium therefore has plenty of room for improvement. Louvet expects prices to be around $ 2,500 an ounce by the end of 2020. The precious metal currently costs just over $ 1,900 an ounce.