The roughly 10 million ounce-a-year palladium market will be undersupplied by around a million ounces in 2021 and the price will average $3,000 an ounce, up 37% from 2020 and the highest on record, consultants Metals Focus said on Tuesday.
The roughly 8 million ounce platinum market would be undersupplied by 68,000 ounces if all investment demand is included and prices would average $1,200 an ounce, up 36% from 2020 and the highest since 2014.
The two metals are used by automakers in engine exhaust systems, where they neutralise harmful emissions. Platinum is also used in other industries and for jewellery and investment.
Both are benefitting from a rebound in global economic growth and tightening emissions standards that force automakers to use more metal per vehicle.
Palladium was trading at around $2,930 an ounce on Tuesday and platinum at around $1,220 per ounce.
(By Peter Hobson)