Spot palladium prices fell below those of sister metal platinum for the first time since April 2018 on Thursday, as growing demand concerns weighed on the metal.

Palladium was down 1.8% at $878.78 per ounce by 0941 GMT, its lowest in five years, while platinum was up 0.1% at $880.52.

Both metals are heavily used in catalytic converters. They are effectively interchangeable in gasoline autocatalysts, and their price spread has encouraged growing substitution of palladium for cheaper platinum in recent years.

“A renewed switch of metals used in autocatalysts by carmakers is unlikely in the near future as cars are produced over longer cycles. Hence, it is possible that palladium trades at a sustained discount to platinum,” UBS analyst Giovanni Staunovo said.

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“I still prefer platinum over palladium, and this is driven by substitution demand which currently favors higher autocatalyst demand for platinum at the expense of palladium.”

Platinum demand for use in autocatalysts rose more than 10% from 2022 to 2023, according to Johnson Matthey research, while palladium demand from the same sector dipped.