Despite the growing hype around electric vehicles, conventional gas-powered vehicles are expected to be on the road well into the future.
As a result, exhaust systems will continue to be a critical tool in reducing harmful air pollution.
The Power of Palladium
Today’s infographic comes to us from North American Palladium, and it demonstrates the unique properties of the precious metal, and how it’s used in catalytic converters around the world.
In fact, palladium enables car manufacturers to meet stricter emission standards, making it a secret weapon for fighting pollution going forward.
The world is in critical need of palladium today.
It’s the crucial metal in reducing harmful emissions from gas powered vehicles—as environmental standards tighten, cars are using more and more palladium, straining global supplies.
What is Palladium?
Palladium is one of six platinum group metals which share similar chemical, physical, and structural features. Palladium has many uses, but the majority of global consumption comes from the autocatalyst industry.
In 2018, total gross demand for the metal was 10,121 million ounces (Moz), of which 8,655 Moz went to autocatalysts. These were the leading regions by demand:
- North America: 2,041 Moz
- Europe: 1,883 Moz
- China: 2,117 Moz
- Japan: 859 Moz
- Rest of the World: 1,755 Moz
Catalytic Converters: Palladium vs. Platinum
The combustion of gasoline creates three primary pollutants: hydrocarbons, nitrogen oxides, and carbon monoxide. Catalytic converters work to alter these poisonous and often dangerous chemicals into safer compounds.
In order to control emissions, countries around the world have come up with strict emissions standards that auto manufacturers must meet, but these are far from the reality of how much pollutants are emitted by drivers every day.
Since no one drives in a straight line or in perfect conditions, stricter emissions testing is coming into effect. Known as Real Driving Emissions (RDE), these tests reveal that palladium performs much better than platinum in a typical driving situation.
In addition, the revelation of the Volkswagen emission scandal (known as Dieselgate) further undermines platinum use in vehicles. As a result, diesel engines are being phased out in favor of gas-powered vehicles that use palladium.
Where does Palladium Come From?
If the world is using all this palladium, where is it coming from?
Approximately, 90% of the world’s palladium production comes as a byproduct of mining other metals, with the remaining 10% coming from primary production.
In 2018, there was a total of 6.88 million ounces of mine supply primarily coming from Russia and South Africa. Conflicts in these jurisdictions present significant risks to the global supply chain. There are few North American jurisdictions, such as Ontario and Montana, which present an opportunity for more stable primary production of palladium.
Long Road to Extinction
The current price of palladium is driven by fundamental supply and demand issues, not investor speculation. Between 2012 and 2018, an accumulated deficit of five million ounces has placed pressures on readily available supplies of above-ground palladium.
Vehicles with internal combustion engines (ICE) will continue to dominate the roads well into the future. According to Bloomberg New Energy Finance, it will not be until 2040 that ICE vehicles will dip below 50% of new car sales market, in favor of plug-in and hybrid vehicles. Stricter emissions standards will further bolster palladium demand.
The world needs stable and steady supplies of palladium today, and well into the future.
An Investor’s Guide to Copper in 3 Charts
Explore three key insights into the future of the copper market, from soaring demand to potential supply constraints.
An Investor’s Guide to Copper
Copper is the world’s third-most utilized industrial metal and the linchpin of many clean energy technologies. It forms the vital connections in our electricity networks, grid storage systems, and electric vehicles.
In the above infographic, iShares digs into the forces that are set to shape the future of the copper landscape.
How Much Copper Do We Need?
Copper is poised to experience a remarkable 54% surge in demand from 2022 to 2050.
Here’s a breakdown of the expected demand for copper across clean energy technologies.
|Technology||2022 (kt)||2050P (kt)|
|Other low emissions power generation||93.7||142.2|
|Grid battery storage||24.6||665.2|
Copper is vital in renewable energy systems such as wind turbines, solar panels, and electric vehicle batteries because of its high electrical conductivity and durability.
It ensures the effective transmission of electricity and heat, enhancing the overall performance and sustainability of these technologies.
The rising demand for copper in the clean energy sector underscores its critical role in the transition to a greener and more sustainable future.
When Will Copper Demand Exceed Supply?
The burgeoning demand for copper has set the stage for looming supply challenges with a 22% gap predicted by 2031.
Given this metal’s pivotal role in clean energy and technological advancements, innovative mining and processing technologies could hold the key to boosting copper production and meeting the needs of a net-zero future.
Investing in Copper for a Prosperous Future
Investors looking for copper exposure may want to consider an ETF that tracks an index that offers access to companies focused on the exploration and mining of copper.
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