Palladium Stocks: How to Invest and the Best Companies to Watch in 2022

Palladium stocks are becoming increasingly popular among investors. As a result, there is much more growing interest in Palladium among different investors.

Over the years, Palladium, which belongs to the platinum group metals, has seen a steep increase in demand, thereby making it more attractive to investors.

With our award-winning* Next Generation trading platform, you can choose to trade Palladium and a few more precious metals, all of which are associated with the commodities market.

Find out how to invest in palladium shares and ETFs, as well as how to purchase physical Palladium.

What is Palladium?

Typically utilized for electronics and industrial products, Palladium is the shiny, silver metal preferred for different manufacturing processes. Dental, medical, chemical, jewelry, and groundwater treatment are also possible applications for this material.

The United States, Russian Federation, South Africa, and Canada produce most of this rare metal, just 46 on the periodic table.

Metal palladium is used in different industrial and electronic products. Platinum group metals include osmium, rhodium, ruthenium, iridium, and rhodium. Russian, South African, American, and Canadian palladium supply is the world's largest.

Gold is 30 times more common than this metal. In addition to being rolled into the sheets, Palladium is used in applications like fuel cells or solar power.

3 Ways to Invest in Palladium

1. ETFs

The exchange-traded funds (ETFs) that track palladium trade are indexed to the precious metal on exchange-like stocks.

Palladium and platinum are the most commonly held metals by the trust at 39,065 ounces and 48,915 ounces, respectively.

A Canadian government crown corporation holds custody of the portfolio. With Aberdeen Standard Physical Palladium stocks or Shares, investors can track palladium price movements with fewer expenses.

In London, the company remains committed to safeguarding the Palladium at JPMorgan Chase & Co.'s (NYSE: JPM).

2. Bullion

Holding the palladium bullion directly is another major way to invest in the Palladium. A portfolio growth strategy is all about buying palladium bullion bars. It also includes buying palladium bullion coins or even collectible palladium coins.

Investors looking to invest both small amounts of money and large amounts of cash may find this approach advantageous.

Another option is palladium bars and wafers, which are more difficult to obtain.

3. Stocks

Investing in a palladium-focused business may also provide investors with exposure to Palladium. It is possible to invest in Palladium through this method, but it is risky.

The majority of Palladium is yet produced in countries with few primary platinum mines. Due to this, gaining exposure to the Palladium is becoming much more challenging.

In North America, there are still two major palladium producers: Sibanye-Stillwater (NYSE: SBSW, JSE: SSW) and Impala Platinum Holdings (JSE: IMP).

Palladium, in addition to platinum and other metals, is available through the following TSXV- and TSX-listed companies:

1. Ivanhoe Mines are developing the Platreef project inSouth Africa (TSX: IVN, OTCQX: IVPAF).

2. The Green Metals Company New Age Metals (TSXV: NAM, OTCQB: NMTLF) is building a diamond mine in Ontario and plans to mine platinum-group metals at its River Valley property.

3. The Nickel Shäw polymetallic project in Canada's Yukon is held by Nickel Creek Platinum (TSX: NCP; OTCQB: NCPCF).

4. There are currently no known reserves for base and platinum-group metals at Wallbridge Mining Company's Sudbury projects in Ontario.

What is the purpose of Palladium?

Palladium is used for various purposes, the most popular one being the manufacture of catalytic converters for automobiles, where its chemical properties allow it to trap dangerous emissions.

MLCCs are also made from Palladium, as are various consumer electronic products plated with Palladium. Because palladium chloride readily catalyzes the conversion of carbon monoxide gas to carbon dioxide, it is highly useful in developing carbon monoxide detectors.

It is also used to create dental inlays and dental bridges in the dental industry. As an alternative to the precious metal platinum, Palladium has been used in jewelry since the 1930s.

Why should you invest in palladium stocks?

Palladium mining stocks can be hence invested in various ways. First, through share trading, Palladium may be purchased at its spot price, that is, at the price for which a trader might obtain it at an immediate delivery.

A futures contract can also be used to invest in Palladium. Asset purchase and sale agreement is essentially a contract between two parties to buy and sell a specific asset in the future at a fixed price. Besides spread bets and CFDs, Palladium can also be traded through derivative products.

As a precious metals investor, you may put a lot of emphasis on the most popular names in the industry. The trading of gold and silver in this area attracts more attention, mainly because most people are aware of these very common market opportunities.

Although valuable metals aren't the only ones to invest in, several should be considered. Unfortunately, Palladium is one of these that retail traders often overlook.

Investors tend to focus on the higher volume gold and silver markets despite this precious metal's strong gains in recent years and more than 1,000% gains since 2008.

Risks of investing in Palladium

Palladium investment does, however, carry some risks: 

• A global recession may weaken Chinese and US automobile demand.

• Substitutes at a lower cost. Cheaper alternatives could be used instead of Palladium in catalytic converters.

• Changing global economic or political conditions could strengthen the American dollar and a decrease in demand for precious metals and other commodities.

Is It a Good Time to buy Palladium Stocks in 2022?

Despite Palladium's higher price than gold, it is still available to traders of all types. Hence, you can use it to diversify your portfolio, just like other precious metal investments. In addition, the fact that it is offered by many of the top online brokers is also making it readily available to all retail traders.

The risk profile of your best palladium stocks investment matters. You will then decide what palladium investment method is best for you. For example, you may want to consider options or futures if you are willing to take on more risk, while ETFs and certain index funds would be a more conservative approach. 

However, Palladium's price and demand growth suggest that traders are more aware of the opportunity to trade this precious metal than other precious metals.

Factors affecting the price of Palladium

Palladium's demand is influenced by many aspects, with one of the main factors being the automobile industry. Europe has witnessed a shift away from diesel-run vehicles to petrol cars, whose catalytic converters are typically made with Palladium rather than platinum.

Palladium demand is also affected by the behavior of the dollar. In the case of the US dollar depreciating against the Russian ruble, Russian producers of Palladium who receive revenue in US dollars may reduce profit margins.

Due to this, Palladium's supply would be decreased to the global market, raising its price. In addition, because Palladium is a secondary product, miners are not likely to increase the amount of extraction and production as they cannot compete in the market with platinum or nickel.

Historically, much of the Palladium mined in South Africa has been affected by increased transportation and construction costs, which have driven up prices.

Palladium has become a precious metal of high value and has been viewed as a haven investment by many investors.

What are the benefits of palladium stocks?

In 1939, jewelers began incorporating Palladium into jewelry. A metal stronger than white gold is formed when the alloy is mixed with yellow gold.

A palladium coin circulating in 1968 commemorated the coronation of King Taufa Ahau Tupou IV of Tonga. This is the first time Palladium has been used in coinage.56

The price of Palladium per ounce is higher than that of gold, as Palladium is more durable and harder.

The metalworker can create palladium sheets as thin as one-two hundred fifty thousandths of an inch. When worked with at room temperature, pure Palladium becomes stronger and harder. These sheets can then be used in fuel cells and solar energy applications.

Palladium is often used in catalytic converters as a catalyst that speeds up chemical reactions. However, this metallic element has a harder and more durable structure than platinum, making it 12.6% harder.

How high will the price of Palladium go?

As estimated by J.P. Morgan, the palladium price is expected to drop to $1,800 on average in the fourth quarter. 

A price average of $2,000 for Palladium is forecast for 2022 and a further decline to $1,500 in 2023. According to ANZ Research, Palladium's price is expected to average $2,393 in 2022 and decline to $2,310 in 2023.

An acute shortage of semiconductor chips, commonly used for engines and touch-screen displays in cars, is driving a decline in prices of Palladium and platinum in the relatively small, volatile markets. This has adversely affected global vehicle production and demand.

With an acute shortage, palladium prices reached records in recent years, making it the most valuable of the four major precious metals. Mostly mined in Russia and South Africa, this metal comes from other operations that concentrate on other metals, such as platinum and nickel.

Hence, it may take until the end of 2021 before supply catches up with demand. Palladium prices could therefore continue to rise rapidly after starting the rally in late 2019. The demand may change between now and then, so this is not set in stone.

How much will Palladium cost in the future?

Palladium is projected to trade at 1862.84 US dollars per tonne. Global macro models and analysts expect these prices to rise by the end of this quarter. In 12 months, we estimate that it will trade at 1699.58.

According to FactSet data, Palladium's price rose to its highest level ever at $2,981.40 on May 3. Demand for metal has also risen due to tighter regulations regarding vehicle emissions.

Its increasing popularity is also related to the use of Palladium for catalytic converters in petrol vehicles over platinum for diesel cars.

Currently, platinum is at $1,050 per ounce, $1,231 per ounce by the end of 2021, $1,749 per ounce by 2025, and averages $2,864 per ounce in December 2030.

As a result of supply disruptions beginning in 2020, the price of Palladium has risen to $ 2,500 per ounce since South Africa and Russia produce a substantial amount of the precious metal.

Top 5 palladium stocks to watch in 2022

1. Sibanye Stillwater (NYSE: SBSW)

Sibanye-Stillwater Limited has operations in North and South America and Southern Africa, with its headquarters in Weltevreden Park, South Africa. 

SBSW price chart

Company assets include gold mines in South Africa, PGM mines in Zimbabwe, Canada, and Argentina. In addition to mining iridium, ruthenium, copper, nickel, and chrome for Sibanye-Stillwater.

The miner owns the only palladium mines in the United States, the Stillwater and East Boulder mines in Montana.

2. Ivanhoe Mines (OTC: IVPAF)

Based in Vancouver, Canada, it finds, develops, and recovers precious metals and minerals. A company mostly focused on Africa, Western Foreland holds a 100% stake in the Western Foreland project within the Democratic Republic of Congo (DRC) and has partnerships in South Africa.

IVPAF price chart

In addition, Ivanhoe Mines is in a joint venture with a Japanese consortium and others to own the recently-discovered Platreef project that will likely include significant deposits of Palladium, platinum, rhodium, gold, copper, nickel, and others.

Besides upgrading the historic Kipushi mine, the mining company also conducts exploration activities in the DRC. As a result, Benzinga's stock under the $10 list includes IVPAF at current levels.    

3. Anglo American Platinum (OTC: ANGPY)

It is the world's leading producer of PGMs and provides complete resource-to-market services to its global network of customers. In addition, Anglo American Platinum mines recycle and trade their products.

ANGPY price chart

PGM products include Palladium, platinum, rhodium, iridium, ruthenium, and osmium. Dalton is headquartered in Johannesburg, South Africa.

With offices in Europe, North and South America, China, Finland, and South Africa, the company serves customers throughout the globe. As well as recycling and reprocessing PGM catalytic converter materials, Anglo American is the world's leading recycler.

4. New Age Metals (OTC: NMTLF)

Established in 1996, New Age Metals Inc., formerly known as Pacific Northwest Capital Group, explores and develops PGM, precious metal, and base metal mining properties throughout Canada.

NMTLF price chart

As well as owning 100% of the River Valley Palladium project in Northern Ontario, the Vancouver-based Company owns 100% of the Genesis polymetallic project in Southcentral Alaska. In addition, several energy projects northwest of Winnipeg are also owned by New Age Metals.

5. Platinum Group Metals (NYSE: PLG)

Vancouver-based Platinum Group Metals Ltd. invests in technology and exploration of palladium and platinum properties. 

PLG price chart

It is primarily involved in South African investments but has a 50% interest in the Waterberg project in Western Bushveld. 

Aside from mining and exploration projects, Palladium and Platinum also develop next-generation batteries. Benzinga's stocks under the $5 list include PLG stock at its current price level.

What is the advantage of Palladium over platinum and gold?

An engagement ring or wedding band made of Palladium or platinum would look great. Platinum is the stronger of the two metals, but both are strong enough for daily-wear engagement rings or wedding rings.

A lack of supply and high demand make Palladium extremely scarce, far more scarce than gold, which has pushed Palladium past gold in recent years. Metals, in general, are good investments.

With Palladium, as with gold, prices often move in inverse relation to the dollar.

FAQs

1. Palladium Is Used For What?

As a catalyst for automobile engines, as a fuel cell, in jewelry, dental fillings, and electronic components, Palladium is used in a wide range of applications. Automobiles emit toxic gases converted into less harmful substances by catalytic converters.

2. A catalytic converter contains how much Palladium?

Depending on the type of automobile, the size of a catalytic converter determines how much Palladium is in it. Palladium is generally used in catalytic converters in quantities between 2 and 7 grams.

3. Palladium: What Is It Worth?

In October 2021, Palladium will cost slightly more than $2,000 per ounce than gold. Except for a dip in 2001 and 2008, palladium prices have steadily increased since the mid-90s.

4. How much Palladium is produced by which company?

Among the world's top palladium producers is Norilsk Nickel of Russia. In addition to mining platinum, nickel, and copper, it is among the world's top metals producers.

5. What are the pros and cons of palladium stock?

Palladium is also valued as an investment and a store of wealth due to its monetary benefits. Therefore, the precious metals complex may soon offer some of the most lucrative opportunities for investment in Palladium.

Bottom line

In Russia, South Africa, and Canada, Palladium is the most abundant metal. It's stronger and more versatile than platinum, from dentistry to automotive to manufacturing to electronics.

Due to Palladium's widespread use in the 1990s, its price has increased significantly. As a result, it is possible to invest in Palladium both physically and through ETFs.

If you are actually looking ahead to invest in such stocks metal, make sure you know its future prices to see how it can benefit you. But make sure you prevent the risks from coming your way.