Capacitor costs hit by palladium prices

Capacitor costs hit by palladium prices
Steve Bush The doubling of world palladium prices in the last year is affecting the cost of making multilayer ceramic capacitors. “Increases in palladium prices are most likely to affect the cost of producing the larger values of multilayer ceramic,” said Martin Baker from capacitor maker Murata. “Manufacturers can either put up prices or take a hit in their margins, which are already narrow.” The industry is also moving to using non-precious alternatives to palladium. “Most capacitor makers are starting to introduce base metal electrode materials. These are proving successful in the field, but more stringent controls are needed during manufacture,” said Baker. Most of the world’s palladium comes from Russia, which stopped shipping it in December 1996, started again in the summer of 1997, then stopped last December. Since then nothing has left the country officially. “Like last year, palladium supply restrictions have caused price rises in 1998,” said a market consultant. “In 1997 it peaked at $250/oz, dropping to $180 when more became available. This year there is very little around. The price climbed to $415, although it is back at $360 now.” According to the consultant, who did not wish to be named: “As far as I can tell, this is not deliberate manipulation. The problems are administrative.” Russia is expected to begin shipping again before the year end. “Prices are unlikely to drop below $200/oz as users over-buy to build-up buffer stocks.”


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