Palladium is finally recovering from a very long bear market. Late Thursday afternoon, it was up more than $10 to $304 a troy ounce, the first time the $300 level has been breached since April 2004.
Look at a five-year chart for palladium, and you will want to start a fundraising telethon for shareholders who held while the price fell from more than $1,000 in early 2001 to less than $150 in early 2003. That fall killed stocks like platinum and palladium producer Stillwater Mining
Palladium is used in the dental, electronics, jewelry, and chemicals industries, but the majority goes to the auto industry, where more than half of what is produced yearly is used for controlling exhaust emissions. But the high cost of platinum, which recently rose to more than $1,000 an ounce, has palladium moving higher. Catalytic converter manufacturers are expected to tweak their platinum-to-palladium mix more in palladium's favor to keep converter prices in check.
Also, two factors added to demand: the Royal Canadian Mint's introduction in 1995 of a 1-troy-ounce palladium coin that targets investors, and strong Chinese jewelry demand.
While there is still a slight surplus of palladium to stop prices from taking off very quickly, the demand for palladium is clearly heating up. This bodes well for producers like Stillwell and North American Palladium
Investors might also want to consider Anglo American
Palladium demand is rising. North American Palladium's stock was up almost 6% in late-afternoon trading, after brushing a new 52-week high Thursday morning, reflecting the promise that rising prices may bring.
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