Palladium futures finished above $1,000 per ounce on Wednesday (November 8), marking their highest close since 2001.
The December palladium futures contract rose by $21.70, or 2.2 percent, to settle at $1,015.80 per ounce. Meanwhile, the palladium spot price was at $1,019.90 as of 3:00 p.m. PST, up $19.80. 
“News of strong China auto sales has boosted palladium prices above the $1,000/oz level and up nearly 50% year to date,” Maxwell Gold of ETF Securities told MarketWatch. The silvery-white precious metal is used mainly in catalytic converters, which help reduce emissions in gasoline-powered vehicles.

Passenger vehicle sales in China, the world’s largest auto market, rose for the sixth straight month in October, Bloomberg reported this week. According to figures released by the China Passenger Car Association, sales increased 2.7 percent to reach 2.3 million units. Carmakers have offered deeper discounts to offset a government sales tax increase introduced at the start of 2017. 
Dan Pavilonis of RJO Futures in Chicago told Reuters in October that palladium prices could also be boosted as consumers replace vehicles destroyed in the hurricanes that hit the US earlier this year.
The auto industry estimates that Hurricane Harvey destroyed up to half a million cars when it ravaged Texas in August. Hurricane Irma followed, hitting Florida just two weeks later and totaling another 200,000 vehicles.
Johnson Matthey (LSE:JMAT) forecasts that global auto demand for palladium will exceed 8 million ounces for the first time this year, widening the supply deficit to 792,000 ounces.
Palladium’s sister metal platinum has not seen the same level of price movement; it rose 1.4 percent on Wednesday to settle at a more than three-week high of $937.90 per ounce. Platinum is used in catalysts for diesel-powered vehicles, which are losing market share to vehicles that use gasoline.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.