After lagging behind other precious metals for much of the year, prices for the white metal—a key element in cars’ catalytic converters—are pulling ahead. Since the beginning of the month, palladium has risen almost 2%, hitting a one-month high on Friday.
Palladium is mostly used in gasoline exhausts, which are more common in the U.S. and China. Platinum, on the other hand, is for diesel-fueled cars like those driven around Europe. Demand for new vehicles in Europe remains anemic as the Continent struggles to fend off an economic slowdown.
U.S. passenger-car sales surged to 1.4 million vehicles in March, a 13% increase over the year-earlier period. In China, they rose by 4.5% to 1.4 million. Catalytic converters are used in cars to help reduce harmful emissions.
China is expected to tighten vehicle-emission standards later this year. That move likely will force car manufacturers there to increase the amount of palladium in catalytic converters, boosting the country’s need for imports, according to Barclays.