Catalyzer metals lost their speculative premium.

About three years ago, the typical catalyzer metals Palladium and Rhodium reached their all time highs in the aftermath of the pandemic. Automobile producers had resumed production, but some mines had been idle because of a drop in demand during the pandemic. Inventories for Pd and Rh were at a historical time low.

Ever since the narrative has been changing. Electric cars are still a lot more expensive than corresponding combustion engine powered cars. But especially the fleet of leasing and rental cars is rapidly making the switch. Changing legislation makes combustion engine cars less attractive as company cars. Among the population, only early adopters made the switch, but hybrid vehicles are getting ever more attractive especially because low emission zones are banning ever more older cars.

Even though combustion engine cars are not on a terminal decline worldwide, their constant to slightly easing production volume implies that peak demand for Pd and Rh is behind us. The price surges of Pd and Rh also made producers of catalytic converters redesign their products, whereby some of the palladium has been replaced by cheaper platinum.

Most countries have enforced legislation on car exhaust fumes requiring catalytic converters over two decades ago. That implies that spent catalytic converters are now widely available, reducing thereby the demand for newly mined palladium.

Catalyser metals lost their speculative premium.

Both graphs below cover the last three years : 9 Apr 2021 to 8 Apr 2024. Source is Johnson Matthey, a key producer of refined platinum group metals, focusing on precious metals recovery from scrap. What you see are monthly average prices.

Monthly average prices in USD/Oz for Platinum and Palladium

The palladium price slid from its peak at $3179/oz to a current price around $1050/Oz. In the mean time platinum only got marginally cheaper. The excessive premium of Pd over Pt has become quite thin. However it should be borne in mind that prior to 2017, platinum used to be more expensive than palladium. Moreover platinum has traded at a premium to gold until the summer of 2014. Platinum has been relatively cheap for about a decade now.

Rhodium has lost its edge compared to the rarest metal: Iridium

Monthly average prices in USD/Oz of Rhodium and Iridium

Iridium is about one order of magnitude rarer than Rhodium. Geologists claim that all iridium came to earth as a result of the impact of one or several massive meteorites. Rhodium traded at an excessive premium compared to iridium three years ago as the metal peaked at $28000/Oz. The premium vanished by summer 2023: the Rhodium price dropped below that of Iridium. But Rhodium remains relatively expensive.