Palladium is widely used in three-way catalytic converters in car exhaust systems. Palladium is also used jewelry and in dental fillings and crowns. Another common use for palladium is in multilayer ceramic capacitors. These are an important part of common electronics equipment such as cell phones, laptops, fax machines, etc. Palladium is also used in connector plating for a number of electronics.
Almost half the supply of palladium was used for the car industry due to tighter emission standards around the world, especially Europe. Palladium is used in catalytic converters to remove hydrocarbons, carbon monoxide, and other harmful gases from being emitted into the air.
Palladium is used as an oxidation catalyst for the oxidation of carbon monoxide to carbon dioxide and for the oxidation of hydrocarbons (unburnt and partially burned fuel) to carbon dioxide and water.
Prices have fallen more than 20% on the New York Mercantile Exchange since a peak in late February, meeting the common definition of a bear market. Palladium dropped as much as 30% Thursday, the biggest-ever intraday loss in records back to 1986. The abrupt turn comes after shortages of the metal used in pollution-control devices pushed prices up by more than half last year.
Fears of economic fallout from the virus, along with slowing Chinese car sales, are now battering the commodity. Investors are rushing to the dollar amid the massive sell-off in U.S. equities, with an index of the greenback rising the most since 2016.
“Physical markets are yet to feel the full impact of the hit to end-use demand,” Citigroup Inc. analysts led by Ed Morse said in a note. The bank lowered its price forecast on the metal for 2020, partly because of “extreme weakness in end-use consumption globally in the near to term.”
From a macro standpoint, last year global car sales declined for the first time since 2009. And according to a Bank of America Merrill Lynch analyst, the U.S. auto industry is heading toward a nearly 30% decrease in sales by 2022.
And it's the same story oversees. China continues to be the world's largest auto market. However, the China Association of Automobile Manufacturers (CAAM) expect a 2% fall in auto sales and this is on the heels of a 8.2% drop in auto sales in 2019.
So how low can Palladium drop, the chart suggest prices will fall to at least the monthly demand at $1125.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted via Steemleo
the fractal indicated as much ;)
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Very true.
Posted via Steemleo
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