FX.co ★ Palladium Rises to 1-Month High

In May, palladium futures in the United States climbed to $980 per ounce, marking their highest level in a month. This increase can be attributed to slight improvements in the domestic auto industry. President Trump implemented tax credits for auto manufacturers to mitigate the impact of the 25% tariffs imposed last month on automobiles. This measure helped stabilize the demand for catalytic converters, a primary driver of industrial palladium consumption. Despite this, a more robust recovery was curtailed by macroeconomic challenges and the expanding market share of electric vehicles, which do not require catalytic converters. The ongoing trade war between China and the US exerted significant pressure on industrial metals and suppressed demand in the world's largest automobile markets. Furthermore, Trump's retaliatory tariffs posed a threat to EU exports. Simultaneously, China is capturing an increasing portion of the energy vehicle market, further diminishing palladium demand. The country's electric vehicle production surged by 47.1% year-on-year in the first quarter, reaching 3.182 million units and representing 41.2% of new car sales in China.