Palladium pricesPalladium prices hit a record as rally extends into a 6th straight year Published: April 16, 2021 at 2:42 p.m. ET By Myra P. Saefong Catalytic converters in automobiles, which reduce pollutants, contain platinum or palladium. Palladium futures climbed Friday to settle at a record, and some analysts say prices show no signs of a slowdown even with the rally for the metal moving into its sixth year in a row. Many people thought palladium at $1,000 was a bubble. Wow was that wrong, said R. Michael Jones, chief executive officer at Platinum Group Metals Ltd. PLG. As the world economy emerges from a COVID economic lock down, personal transport will almost certainly be very popular. Given that, palladium looks very good here in the short and medium term, he told MarketWatch.Long term new applications for palladium and the other platinum group metals look interesting in terms of the energy transition from hydrogen to batteries, he added. On Friday, the most-active June palladium contract PAM21 PA00 rose $35.30, or 1.3%, to settle at record high of $2,774.70 an ounce on Friday, according to Dow Jones Market Data. As the global economy emerges from the effects of the lockdowns, demand for consumer and industrial goods is on the rise, said Chris Blasi, president and chairman at Neptune Global. Increased automobile production directly drives increased demand for palladium, which is drawing on a strategic metal whose annual industrial demand has outstripped mine output for several years. Palladium is mainly used in catalytic converters in gasoline-powered vehicles to help control emissions. Additionally, heightened geopolitical tensions with the worlds largest supplier of palladium, Russia, is a factor that cannot be ignored or minimized, Blasi told MarketWatch. Theres also an acute shortage of the metal, which appears entrenched for the foreseeable future, he said. When asked how high palladium prices may reach this year, Blasi said the chance for prices to touch $3,000 remains very real. Palladium prices have already climbed by around 13% year to date, after posting gains for the past five years in a row, FactSet data show. Peter Thomas, senior vice president at Zaner Precious Metals, also offered an upbeat outlook for palladium amid expectations for growth in photovoltaic sector and electric vehicle market. Palladium is used in electronics and solar energy applications. Photovoltaics are used to generate electric power through solar cells. All electric cars use metals that transfer electricity, and platinum PLN21 , palladium, rhodium and silver SIK21 have low electricity resistance values and theyre great for semiconductor chips, said Thomas. Read: Why rhodium has stretched a rally that saw prices for the metal nearly triple last year Based on his recent discussions with some platinum and platinum producers, he believes palladium prices may be facing a climb to $3,500 in the next year.