LONDON (Commodity Online): PDA is the abbreviation of public demonstration of affection and certain Hindu right wing organizations in India have been campaigning against it vigorously in the recent past. But, now the world is in the grip another sort of PdA! That is Palladium Affection. Palladium has the chemical symbol Pd. Yes, the world is in the grip of a palladium fever with investors rushing to buy the metal considering its rising demand from auto sector, which witnessed a surge in sales in the recent past. Palladium is a precious metal mainly used in the production of auto engines. To add to that a new type of fuel-efficient engine being produced in developed nations requires more of platinum and palladium for its exhausts. According to commodity analysts, when developed nations recover from the recession, demand for these engines will go up and so will the demand for palladium. The palladium affection or addiction of the world started during the 2000 when Russian supply of palladium to the global market was repeatedly delayed and disrupted because the export quota was not granted on time for political reasons. The ensuing market panic drove the palladium price to an all-time high of $1100 per troy ounce in January 2001. Around this time, the Ford Motor Company, fearing auto vehicle production disruption due to a possible palladium shortage, stockpiled large amounts of the metal purchased near the price high. When prices fell in early 2001, Ford lost nearly $1 billion. World demand for palladium increased from 100 tonnes in 1990 to nearly 300 tonnes in 2000. The global production of palladium from mines was 222 metric tonnes in 2006. Then the palladium rush saw a fall in 2008 when the world economy was in recession mode with auto sales plummeting. However, in 2010, palladium seems to be the best bet for investors as the metal is set to scale new heights. Russia, which holds the largest stock of palladium, is expected to benefit hugely as it will have strong control over the market. Palladium reserves around the globe are scanty and production has gone down over the last couple of years. The metal is mainly produced through two methods — underground (mining) and aboveground. South Africa and Russia are the leading producers in the underground and aboveground methods, respectively. Most Indians are not aware that palladium is also used to make jewellery. Palladium is lighter than platinum, having about the same density as silver. It is used as an alloy when producing white gold. Thus, it too is a jewellery metal. Globally, palladium ETFs have been listed on stock exchanges, allowing investors to take demat possession of the metal. Another way to participate in the palladium market is by buying stocks of palladium producers. More than 1.7 million ounces of the metal, equivalent to about a third of annual global consumption, were held by palladium ETFs. According to analysts, palladium may trade as high as $650 an ounce in the near term but is more likely to stay in the $475-$575 range. More than half of the yearly demand for palladium goes to manufacturing catalytic converters, devices used in cars to scrub pollutants out of exhaust. Rising car sales in the US, Europe and emerging markets, and improvements in manufacturing indicators around the world signal that demand from end users could remain robust. In contrast to palladium held by funds, that used by industry can disappear from the market for years until resurfacing through recycling. It is disappearing at an accelerating rate as auto demand recovers. US March auto sales jumped 24% from March 2009 to more than one million cars and light trucks. Manufacturing indexes also improved in the US, China, the UK and Germany, among other nations.

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