The price of palladium, a metal used to reduce harmful emissions in vehicle exhaust, has surged to a record high, making it a precious metal more expensive than gold.

According to the New York Mercantile Exchange, the price of palladium futures for December delivery closed Tuesday at $1,871.30 per ounce, 0.67 percent higher from the previous session.

The figure rose nearly 49.2 percent from the price on Dec. 31 last year, which was $1,253.90 per ounce. Its growth rate far surpassed those of other major metals.

The rate of rise for gold futures marked 14.4 percent in the given period, while silver and copper futures rose 7 percent and 1.5 percent, respectively.

Palladium’s price has overtaken that of gold this year.

Gold futures for December delivery on the COMEX division of the New York Mercantile Exchange closed Tuesday at $1,462.60 per ounce.

The price of palladium overall has a rising curve. While it has gone up and down, it has marked steep growth from November.

Market experts attribute the price surge to growing demand as a result of environmental concerns. China’s participation, in particular, is a major factor. 

“Strengthening regulations on green cars by China and Europe and implementing the United Nations’ International Maritime Organization’s IMGO 2020 rule have increased demand for palladium,” said Kim So-hyun, an analyst at Daishin Securities.

Palladium’s price will remain strong for a while, amid imbalance between supply and demand of the metal. In the beginning of this year, the financial market predicted that automakers would produce catalytic converters with platinum instead of expensive palladium, but that did not materialize.

“Concern about excessive demand wouldn’t be resolved in a short-term period. Therefore, the price of palladium will continuously rise,” Kim said.

“Palladium’s demand will be at a steady tone until commercializing electronic vehicles. Further, South Africa, the second-most palladium producing country, might experience a shortfall that would lead to even greater price rise,” she added.

By Jie Ye-eun (yeeun@heraldcorp.com)