Palladium Shortages Hikes Prices

Consumption of palladium, led by automotive demand, will again outstrip production in 2013, Bloomberg News predicts.

The global auto industry uses the precious metal, usually in a blend with platinum and rhodium, in catalytic converters.

The news service notes that global auto sales are expected to climb by nearly 3 million units this year to 83 million vehicles.

But Barclays plc expects the world supply of palladium which shrank 11% in 2012 to grow only 0.3% this year. A separate report by Morgan Stanley forecasts that shortages will continue until at least 2017.

Palladium prices have surged 10% in the past three months to $675 per ounce. Morgan Stanley expects prices to climb to at least $770 per ounce by the fourth quarter of this year, still well below the metal's peak price of $1,125 per ounce in 2001.