Uses In The Auto Industry
When it comes to the automotive industry and the use of metals is more platinum or palladium used? The answer depends on when the question is posed, because these are both very similar in many respects and are used as a catalyst material in order to create a chemical reaction. Since they belong to the same group, they have a very high melting point that is around 4,000 degrees F, and they are both used in certain emissions components including catalytic converters. Increasing pollution control standards for automobiles and other vehicles has boosted the demand from this sector in recent years.
In 2003 more palladium was used, but in other years platinum saw a majority of the demand. Since either can be utilized for the same purpose automakers generally switch between them, depending on the current price. Retooling requires some time and some expenses, so the car manufacturers will not take this step if there is only a few dollars difference in price. Right now the difference is around $1,000 an ounce though, and that is substantial enough to make the industry take notice.
Even though both of the metals are suitable for emission control palladium does offer one advantage in this area. It has a higher tolerance to heat, and that allows it to be placed closer to the engine without reducing the effect. This may also help reduce emissions even further.
The percentage of each of these materials that is used can change from one year to the next. At times one may be preferable but then conditions change and the other suddenly seems like the more desirable option instead. In general palladium is the most common choice though, and it does offer a few benefits that can not be matched when another option is substituted instead. In the last few years there has been much more of this material used, and this is partly due to the pricing differences on the market but also because it is a superior choice in some ways as well.
The cost of each one is not only impacted by the automobile sector though, there may be high demand from other areas as well. As more investors discover these types of bullion they have started to buy up the available supply. That has helped to push the cost of both upwards, and created a situation that could cause a cycle of higher demand and then price increases on a regular basis.
5 Important Differences
1. Strength- Platinum is stronger than palladium and this strength increase can range from 5% to 25% depending on how the metal is treated. For investment purposes, the strength may not be the most important consideration but it should be a factor that is evaluated. Platinum is preferred for jewelry and certain other industries because of the increased strength the metal offers.
2. Price- The price is very different and this is an important consideration for investors. The value of platinum is currently roughly three times that of palladium, even though both metals are considered rare by modern standards. An ounce of platinum has a market value that is much greater than an ounce of palladium, making it a better choice for some investors who have a larger budget.
3. Density- Platinum has a density that is more than twice that of palladium. A gram of each metal will show that the volume is larger with palladium because platinum is denser so the same volume will weigh more. This also means that palladium requires more storage room for the same weight.
4. Rareness- Both types are very rare and they are considered two of the most precious metals available. 15-20 ounces of gold will be recovered for every ounce of platinum removed from the earth. In contrast palladium is even more rare and is found in lower quantities in nature than platinum. Between the two palladium is considered more rare and valuable even though many investors believe that platinum is the rarest precious metal it is possible to invest in.
5. Metal Use- Platinum may be preferred if the metal will be used for purposes that require intricate designs or complicated minting processes. Palladium may be ideal when a metal that is not as dense is needed.