Palladium futures were in the red in the middle of the trading week as slumping demand and this week’s market rout affected the industrial metal. Prices have rebounded in recent weeks after crashing to a 2020 low of around $1,400, and many analysts are bullish on palladium’s future. But the dash to cash could install a cap on palladium’s ascent to $3,000 by the end of the year.

April palladium futures tumbled $23.50, or 1.23%, to $1,884.10 per ounce at 17:04 GMT on Wednesday on the Comex division of the New York Mercantile Exchange. While palladium has rallied 35% over the last 12 months, it is down 1% year-to-date.

Palladium prices have traded relatively sideways since climbing above $2,000 at the end of March. But they experienced a steep selloff on Tuesday as investors liquidated their assets to pour into cash. The broader market rout, driven by the collapse in West Texas Intermediate (WTI) crude oil prices to below zero, affected every asset class, including the metal commodity.

Although palladium has rebounded thanks to fiscal and monetary stimulus, demand continues to weigh on the asset. With major economies still under lockdown orders, automakers are not producing vehicles. Since governments have introduced tighter emission standards, car manufacturers have turned to the metal in recent years, accounting for 85% of demand. Palladium is used for catalytic converters to slash emissions, allowing these companies to adhere to environmental regulations.

There have been reports that some governments are considering curbing these emission standards when markets reopen. Because it costs more for these companies to abide by the government’s environmental regulations, businesses would use the savings to invest more in operations and hire more workers. This speculation has also driven down the price since the COVID-19 pandemic.

South Africa, a top palladium producer, remains under lockdown. The country has deployed more than 70,000 soldiers to enforce the lockdown as tensions continue to mount. Leaders have unveiled a roadmap to reopening the nation after health authorities confirmed South Africa flattened the curve. The fear, however, is that the continent could see 10 million cases in the next six months, according to various forecasts. If the projections are accurate, it will impact various oil and mining operations across the region.

South Africa has nearly 3,500 confirmed cases and 58 deaths.

In other metal markets, June gold futures surged $47.10, or 2.79%, to $1,734.09 per ounce. June silver futures picked up $0.335, or 2.25%, to $15.21 an ounce. June copper futures added $0.055, or 2.49%, to $2.285 an ounce. June platinum futures edged up $6.40, or 0.84%, to $764.80 per ounce.