Goes Well With:
The Palladium Maple Leaf was first available in 2007, but was taken off the market for a number of years. As a result of investor demand, the coin was returned to the bullion market. Each coin contains 1 Troy ounce of .9995-pure palladium.
When compared to gold and silver, and like platinum, palladium has a relatively short history of use.
William Hyde Wollaston noted the discovery of a new precious-like metal in July 1802 in a lab-book he had written. He named it palladium in August of that year.
Palladium played an essential role in the Fleischmann-Pons experiment in 1989 and is considered to have key applications to cold fusion technology.
Heading into the year 2000, the Russian supply of palladium to the global market was repeatedly delayed and disrupted, as the export quota was not granted on time. Thus ensued a market panic which drove the price to its all-time high of $1,100 per troy ounce in January 2001.
Interesting to note, the Ford Motor Company, fearing auto vehicle production disruption due to a possible palladium shortage, stockpiled tons of palladium.
World demand for palladium increased from 100 tons in 1990 to nearly 300 tons in 2000. In 2007 Russia was the top producer of palladium with a 44% world share, followed by South Africa with 40%, Canada with 6% and the U.S. With 5% are the only other substantial producers of palladium.
Palladium can be found as a free metal alloyed with gold and other platinum-group metals in deposits of the Ural Mountain, Australia, Ethiopia, North and South America. For the production of palladium these deposits play on a minor role. The most important commerial sources are nickel-copper deposits found in the Sudbury Basin, Onatario, and the Noriksk Talknakh deposits in Siberia. Palladium is found in the rare minerals cooperite and polarite.
Palladium is also produced in nuclear fission reactors and can be extracted from spent nuclear fuel, though this source for palladium is not used.
The largest use of palladium today is in catalytic converters, though palladium is also used in jewelry, in dentistry, watch making, in blood sugar test strips, in aircraft spark plugs and in the production of surgical instruments and electrical contacts.
A bill authorizing the United States Mint to produce and distribute a 1 troy ounce palladium coin was passed into law on December 14, 2010.
Russian Palladium Reserves “Pretty Much Exhausted”
In 1999, during a scare over Russia’s palladium supply, the metal ran to an unprecedented $1,200 about (a price point at which Ford bought substantial holdings in the metal) before collapsing in a multi-year consolidation period getting ready for its most recent secular-bull market.
Russia is the world’s largest producer of palladium and, with palladium double its point at the start of 1999, it is likely all-time highs are on the cusp of revisit.
Here is a note on Ford’s mismanaged palladium stockpiles from 2002 in the Wall Street Journal:
DEARBORN, Mich. — Last month, Ford Motor Co. F -1.37% shocked Wall Street with a $1 billion write-off of thevalue of its stockpile of precious metals, primarily palladium. Why had the No. 2 car company made a massive bet on a commodity notorious for its price volatility?
With Russian inventory sales having dropped 68% to 250,000 ounces last year from 775,000 ounces in 2011, sales from state stockpiles are expected to range from an unprecedented “zero to several tons” in 2013, according to the deputy chief of ZAO Normetimpex, OAO GMK Norilsk Nickel’s sales arm Anton Berlin. This is essentially the same thing that happened at the turn of the 21st century.
“Maybe 3 tons this year, and that will be it,” Peter Duncan, general manager of market research at Johnson Matthey, told London reporters on January 25. 3 tons equals 96, 452 troy ounces. “Russian state stockpiles have been dwindling and are now pretty much exhausted.”
The shrinking stockpiles from Russia come at a time when output is generally falling leading to the biggest shortage of palladium in twelve years. South African output – the world’s second largest producer of palladium – was hurt by labor disputes and strikes, while lower grades contributed to a decline in Russia.
The palladium supply itself fell 12 percent in 2012 to 6.48 million ounces due to the South African strikes. In November, Johnson Matthey conjectured that the supply would lag demand by 915,000 ounces in 2012, the biggest deficit since 1999.
The global net demand for platinum grew by 4 percent to 6.17 million ounces, off from the forecasted 6.24 million ounces and gross automotive industry demand was steady at 3 million ounces in 2012.
In 1999, palladium started the year with a price point of $335. This year, palladium is double that number, and with the dire news out of Russia, it is likely that the continuing shortage will propel palladium to a next leg. Expect more mining in the Bushveld, as well.
Palladium Maple Leafs, which had been a liquid precious metal purchase in recent memory, were delayed in the Spring of 2012 by many bullion dealers.