Palladium moves into the mainstream

BILLINGS, Mont. — When Frank McAllister talks about palladium, his passion is palpable.

So when the Stillwater Mining Co. CEO compares the precious metal to a fairy-tale princess, one can’t help but wait for the explanation.

“It’s like Cinderella, really,” he said, smiling. “It’s this pretty thing that’s been kept in the closet. And now it’s emerging.”

OK, at first glance, palladium does appear as a black chunk of rock. And, yes, once it’s refined and polished, it glows with a luster.

For years, the precious metal mined in Montana has filtered pollutants from car exhaust. What’s new is that the princess seems poised for the ball. And she’s decked out in stunning white jewelry that is taking the industry by storm.

Palladium is a relative newcomer to the jewelry market, but its entrance has been dramatic. Some in the precious-metals business predict that it will incite a revolution.

“I believe that what you’ll see in the next two to three years — it boggles my mind,” said Dawn McCurtain, in charge of marketing for the newly formed Palladium Alliance International. “Palladium gives the opportunity to have a metal that’s precious and pure and that can be put into designs never thought of in the jewelry industry before.”

The seeds of the recent movement took root in China, the world’s largest market for palladium jewelry. There, demand leapt from 70,000 ounces to more than one million ounces in the past four years.

The palladium tide has crossed the Pacific, with jewelry manufacturers and designers like Frederick Goldman, Inc. and Scott Kay jumping on board. The latter, described as the E.F. Hutton of jewelry (when he talks, people listen), raves about the new trend. He predicts that it will be the industry’s white metal of choice within two years.

“Palladium is going to explode into our industry — unlike anything we have seen before,” Kay wrote in a letter to his colleagues.

Palladium remains a small player in the jewelry market. Less than 1.5 million ounces went into jewelry last year, compared with 80 million ounces of gold.

But it’s grown far beyond what McAllister ever envisioned. In March, Stillwater Mining launched the Palladium Alliance International, inviting others to join.