Is palladium, for the first time in nearly 16 years, about to become more expensive than platinum?
The price difference between the two raw materials fell to less than $100 an ounce this month as palladium flirted with its highest price since September 2014 but its cousin eyed its cheapest level in 15 months.
Both sometimes can be sensitive to the kind of precious metal cachet afforded gold with moves by the dollar also having an impact.
Retail investor sentiment plays a part, too, with buying of metal-focused exchange traded funds capable of powering the market.
But the cause of current price convergence is of a more fundamental nature. The palladium market is witnessing a rising deficit, according to Johnson Matthey, a UK chemicals multinational, in contrast to platinum in 2017 having its first surplus in six years.
In particular, the platinum market in 2017 is believed to be facing softer jewellery and automotive demand.
Analysts think Chinese production of platinum trinkets will contract.
Both metals are used to make catalytic converters in vehicles. But platinum is used more for diesel catalysts — and auto analysts are warning about a drop in market share for diesel amid an environmental backlash.
However, commodities analysts at ICBC think “the threat to diesel car sales in Europe has been overstated”. And they see “a global platinum market that is more or less balanced and is likely to remain so for at least the next two years”.