Global palladium output fell 7% in 2020; Russia was the biggest palladium producer - report
(Kitco News) - Global palladium production declined by 7% in 2020. Russia was the largest producer of palladium, followed by South Africa and Canada. South Africa controls a whopping 91% of global PGM resources.
The precious metals sector has significantly improved across the board, but palladium’s surge is stealing the spotlight with ~350% growth in price over the past five years.
Palladium is widely used in catalytic converters by the car industry. Introduction of more stringent emission standards for automobiles in some countries resulted in significantly increased demand for palladium for use in catalytic converters.
The palladium market has been in an annual supply/demand deficit for several years now and the supply of primary palladium tightens up.
According to the preliminary data released by the U.S. Geological Survey (USGS), global mine palladium output was 210,000 kilograms in 2020, a 7% decline compared to 2019 (227,000 kilograms).
The worldwide output of palladium in 2020 was primarily impacted by temporary lockdowns related to the COVID-19 pandemic as well as increased labor costs, increased costs for electricity and challenges related to deep-level mining.
Global mined palladium output, kilograms. 2020* preliminary data. Source: USGS.
With 91,000 kg of mined metal, Russia was the largest producer of palladium in 2020, followed by South Africa (70,000 kg). Canada sits third (20,000 kg), ahead of the United States (14,000 kg) and Zimbabwe (12,000 kg). Other countries contribute insignificantly to the overall palladium production (2,600 kg).
Production of palladium declined in Russia, South Africa and USA, increased in Zimbabwe and remained unchanged in Canada.
Palladium producing countries ranked by output, kg. 2020* preliminary estimates. Source: USGS.
According to USGS, South Africa controls a whopping 91% of global PGM resources, but persistent problems surrounding the local platinum-palladium industry could prevent South Africa from significantly increasing palladium output anytime soon and, as such, its deficit is likely to widen.
Global PGM resources, kg. Source: USGS.