Russia’s Norilsk Nickel, the world’s largest producer of palladium, says carmakers won’t switch away from the metal in catalytic converters despite a record 80 per cent surge in prices over the past year.
The miner said palladium consumption will increase by 100,000 ounces this year as carmakers in China and Europe reduce emissions to meet tougher regulatory standards.
“Automakers have little appetite for changes in the catalyst chemistry as their engineering resources are focused on meeting new tighter emission legislation,” Norilsk said.
The high price of palladium has become an increasing concern for carmakers such as Toyota, whose use of the metal in its hybrid cars has led to a surge of thefts.
Palladium has risen by over 400 per cent since the beginning of 2016 and is trading at a record high of $2,732 an ounce.
Toyota says it has reduced the amount of precious metals it uses in its catalytic converters by up to 84 per cent in its newer hybrid models.
But Norilsk said it expected the amount of palladium used in petrol cars to increase by around 5 to 7 per cent this year as carmakers in China prepare to meet the China 6 emission standard and those in Europe new real-world driving emission tests.
Alternative platinum-based catalytic converters are “inefficient” at the high temperatures of petrol car exhausts, Norilsk said.
In addition carmakers “are too busy with a transition of their internal combustion engines to EV technologies and thus do not want to spend both engineering, research and financial resources on new auto catalyst technologies,” it said.
Norilsk said mined supply of palladium will fall by 2 per cent this year to 7.1m ounces.