# Load packages
library(readr)
library(dplyr)
library(lubridate)
library(ggplot2)
# Import The Data
palladium_prices <- read_csv("PaladiumData.csv") %>%
mutate(date = mdy(date))Choosing Palladium
Palladium was something that I had never heard of before starting this project. When I was able to find data on it, I was certainly intrigued to see what it was and how it has been used throughout recent history. Throughout time, palladium has found itself in many interesting spots including clean air and even nuclear bombs. Additionally, I had no idea that the element had increased so heavily in price in recent years. As I got to learn more about the prices of palladium, I got to learn more about palladium itself and its many uses. This intriguing element certainly caught my attention and allowed me to expand my own knowledge about the world. All information was gathered from sources under the citations section.
Listed below is a quick glance at the data.
knitr::kable(head(palladium_prices))| date | value |
|---|---|
| 1977-01-05 | 51.25 |
| 1977-01-06 | 51.90 |
| 1977-01-07 | 53.00 |
| 1977-01-10 | 52.25 |
| 1977-01-11 | 52.00 |
| 1977-01-12 | 52.25 |
Listed below is a visualization of the data. The three areas outlined in red, blue, and yellow are all areas of which will be discussed.
ggplot(data = palladium_prices) +
geom_line(mapping = aes(x = date, y = value)) +
geom_vline(xintercept = as.Date("1977/06/27"), color = "red") +
geom_vline(xintercept = as.Date("1980/02/25"), color = "red") +
geom_vline(xintercept = as.Date("1998/01/01"), color = "blue") +
geom_vline(xintercept = as.Date("2003/04/28"), color = "blue") +
geom_vline(xintercept = as.Date("2020/03/09"), color = "yellow") +
geom_vline(xintercept = as.Date("2021/04/26"), color = "yellow") +
theme_dark() +
labs(y = "International Price In Dollars", title = "Prices of Palladium over Time", subtitle = "From 1977 to Now", caption = "Source: Macrotrends.net")
Three Major Turning Points for Palladium
Clean Air and Precious Metals
The sixties and seventies were a great time of change in the United States. Something that came about as a result of that change was the Clean Air Act. This was modified in the seventies, and due to what it had said about certain metals, gold, silver, and palladium being seen as cleaner alternatives to other substances. This caused for demand (especially within the United States) of all three to increase. Though gold and silver were more highly effected, palladium still had a noticeable and positive difference in price. This is the data displayed by the red area on the visualization of the data. For comparison, the price of palladium on June 27th, 1977 was $45.30. By February 25, 1980, the price had increased to $296.20.
Because of this, within the theoretical model of the palladium industry, the excess demand curve would shift to the right, allowing for an overall international price increase in palladium.
knitr::include_graphics("Clean Air and Precious Metals.png")
Catalytic Converters
Similar to palladium’s last boom, the next boom was also driven by an increase in demand. Ironically, this boom also had to do with attempts to save the earth’s ecosystem. More environmental standards and restrictions placed on catalytic converters- a car part/ heater part that converts toxic gasses into less harmful substances. This caused for substances like platinum, rhodium sky, and of course palladium (all substances used within these converters) to increase in price drastically. However, this lasted less than ten years. The market for catalytic converters had gotten more competitive by 2003, and more people were willing to make it for cheaper prices. More information about the converters became more widely known, giving everyone a chance to produce them. When the price of catalytic converters dropped, so did the price of palladium. This is the data displayed by the blue area on the visualization of the data. Before the boom, on November 18, 1996, the price of palladium was $118.67. At the peak of the boom on January 29, 2001, the price had increased to $1,055.15. After all was said and done, on April 28, 2003, the price had gone back down, now at $154.00.
Because of this, within the theoretical model of the palladium industry, the excess demand curve would shift to the right, and then back down to the left. This would allow for an increase in price of palladium, followed by an immdediate decrease in the price of palladium.
knitr::include_graphics("Catalytic Converters.jpg")
The Shortage and Coronavirus
In March 2020, the COVID-19 took the world by storm. It seemed that the entire world had shut down in some form or another in an effort to keep the country healthy and without illness. Many people expected this to decimate the palladium industry, since it had historically been used in the production of cars. In an effort to protect themselves financially and their workers health-wise, suppliers cut production. However, demand seemed to increase. This is because people were stuck inside their own homes with noting to do. Many of them turned to electronic devices as a source of entertainment. Palladium has been known to be a component in computers and other devices. This is the data displyed by the yellow area on the visualization of the data. The lowest price palladium had reached in 2020 was on March 16, 2020 at $1,540.20. This price peaked less than a year later and almost doubled at $2,953.70 on April 26, 2021.
Because of this, within the theoretical model of the palladium industry, the excess demand curve would shift to the right and the excess supply curve would shift to the left. This would allow for a great increase in the price of palladium.
knitr::include_graphics("The Shortage and Coronavirus.png")
In Conclusion
The international Palladium industry has been through quite a bit since 1977. The substance that once cost $51.25 now is worth over $2,000. Many speculate for this market to continue to vastly change as the world changes around Palladium. It will be interesting to continue to see how such a seemingly insignifigant metal shapes the world around us.
List of Citations
“Catalytic Converter.” Wikipedia, Wikimedia Foundation, 8 Nov. 2021, https://en.wikipedia.org/wiki/Catalytic_converter.
“Evolution of the Clear Air Act.” EPA, Environmental Protection Agency, 8 Oct. 2020, https://www.epa.gov/clean-air-act-overview/evolution-clean-air-act.
Garside, M. “Total Palladium Supply Worldwide from 2005 to 2018.” Statista, 30 Apr. 2021, https://www.statista.com/statistics/418218/global-palladium-supply/.
“Investment Catalysts: Palladium’s Inexhaustible Price Swings.” Winton, 28 June 2017, https://www.winton.com/longer-view/palladium-price-swings.
Pakiam , Ranjeetha, and Eddie Van der Walt. “Analysis | How Palladium Became a Really, Really Precious Metal.” The Washington Post, WP Company, 20 Jan. 2021, https://www.washingtonpost.com/business/energy/how-palladium-became-a-really-really-precious-metal/2021/01/14/6e2d775a-568b-11eb-acc5-92d2819a1ccb_story.html.
“Precious Metals in Electronic Devices.” Price and Izant Company, 9 July 2015, https://princeizant.com/news/precious-metals-in-electronic-devices.
Schwab, Charles. “Palladium Prices - Interactive Historical Chart.” MacroTrends, https://www.macrotrends.net/2542/palladium-prices-historical-chart-data.
Yue Li, Yvonne, and Eddie Spence. “Palladium Hits Record as Supply Shortage Deepens on Auto Demand.” Bloomberg.com, Bloomberg, 21 Apr. 2021, https://www.bloomberg.com/news/articles/2021-04-21/palladium-hits-record-as-supply-shortage-deepens-on-auto-demand.
“‘The Price List’ and Its Evolution - Catalytic Converters.” PMR, 21 Oct. 2020, https://pmrcc.com/the-evolution-of-the-price-list/.