Palladium prices continue setting new records, while investors bet on reducing supply. And this means that the growth just started, Bloomberg reports.

Metal used in pollution-control devices gained in price more than 9% this year and became the best performing among major metals. Demand is growing thanks to China that targets smog reduction. Tighter standards in regards to pollution mean that car makers consume more palladium.

It shall be noted that supply deficit has been observed for eight years already. About two thirds of all volumes are produced by Russia and South Africa. Automobile sector consumes about 70% of all mined palladium.

Price gained 5,2% last week. On Friday it reached $1168,30 per ounce and traded for $1161,90 today in the morning.

And although the risk of substitution of palladium by platinum, which has similar chemical properties, still exists, such substitution might take from 18 to 24 months. Therefore, long-term outlook for the price is positive.