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Palladium


The_Muns
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Guys and Girls,

 

Looking at the historical charts on this metal, it seems to of bottomed out and could be on the start of an upward trend.

Seeing its last peak during the dot com boom years and hopefully IT budgets are set to improve over the next few years, I wondering if anyone had some good information on this metal, the reason for such a large spike over 2000.

 

Thanks in Advance

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Hi Muns,

 

I used to take a passing interest in the palladium price when I held Platinum Australia shares (for the Panton Sill palladium/platinum project).

 

Simplistically, platinum and palladium are essential and interchangeable components of the pollution control systems in new cars (catalytic converters). They tend to have a see-saw price relationship, when one becomes expensive, factories re-tool and substitute the other metal in the manufacturing process. One could expect that substitution of palladium will accelerate with such a marked price differential.

 

The price spike in 2000 was primarily due to Russia. Russia (via the Norilsk mine) is a major supplier of the worlds palladium, and in 2000 it was unable to export the metal due to a delay in receiving central government authority. This played merry havoc with the futures market, and futures trading in palladium had to be suspended for a while as the market went into meltdown.

 

There are not many ASX opportunities for speculating on the palladium price, PLA and RML would be the two that come to mind.

 

R/happy

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  • 1 year later...

The last resources dog left in the pound?

 

 

- Charts

 

(1) http://futures.tradingcharts.com/chart/PA/M

 

(2) http://clearstation.etrade.com/cgi-bin/det...t=peek&period=d

 

 

- Background

 

(1) http://www.mbendi.co.za/INDY/MING/plat/p0005.htm#10

 

(2) http://minerals.usgs.gov/minerals/pubs/com.../platimcs05.pdf

 

 

- Direct Trading

 

(1) Futures or Contracts for Difference

 

 

- Dampeners

 

(1) http://clearstation.etrade.com/cgi-bin/det...t=peek&period=d

 

(2) http://clearstation.etrade.com/cgi-bin/bbs?post_id=6393839

 

(3) Mine production PGM

 

Platinum Palladium Reserves Reserve base

2003 2004e 2003 2004e

World totals 205,000 218,000 182,000 190,000 71,000,000 80,000,000

 

 

- Potential catalysts

 

(1) "Platinum is the catalyst used by fuel cells to convert hydrogen and oxygen to electricity. Palladium will likely also play a role in the fuel cell as well."

 

(2) http://www.bloomberg.com/apps/news?pid=100...mmodity_futures

 

Palladium Reaches 3-Month High on Russia: World's Biggest Mover

 

March 4 (Bloomberg) -- Palladium in Tokyo rose 9.5 percent, the

biggest fluctuation of any commodity today, on speculation that Russia, the

world's top producer, is holding less of the metal than some analysts have

estimated.

 

Russian President Vladimir Putin yesterday approved the release of

production and inventory figures for platinum-group metals and diamonds.

Soviet-era laws had treated the data as state secrets. Palladium is used to

make autocatalysts, which reduce emissions from cars and trucks, and

jewelry.

 

``It is possible someone knows Russian disclosures on palladium stocks

might be more bullish than anticipated,'' said Wolfgang Wrzesniok-Rossbach,

a precious metals analyst with Dresdner Kleinwort Wasserstein in Frankfurt.

``There is some industrial buying going on. Prices are relatively low.''

 

Palladium for delivery in February 2006, the most actively traded

contract on the Tokyo Commodity Exchange, rose 60 yen, the most allowed

under exchange rules, to 693 yen a gram, or 21,552 yen ($204) an ounce. It

was the highest for a most active contract since Dec. 7.

 

In London, palladium for immediate delivery was up $10.75, or 5.4

percent, to $209.25 an ounce as of 3:46 p.m. The metal's two-day gain of 11

percent is the most since January of last year. Palladium touched a 13-month

low of $176.50 in December and still costs less than one-fourth as much as

platinum, a rival precious metal.

 

Shares of Stillwater Mining Co., the only U.S. producer of palladium

and platinum, jumped as much as 13 percent, the most since April 30. They

traded up $1.17, or 11 percent, at $11.97 in New York at 11:12 a.m.

 

OAO GMK Norilsk Nickel, the Russian producer of about half the world's

palladium, owns 56 percent of Columbus, Montana-based Stillwater. Norilsk

spokesman Dmitry Usanov was away until March 9 and couldn't be reached to

comment on when the Moscow-based company plans to release any data, said his

assistant, who declined to be identified.

 

Russian Inventory

 

Decrees signed by Putin enact changes approved by the government in

2003, the Kremlin said in a statement. The Soviet Union, which broke apart

in 1991, had barred disclosure of the data because of the metals' use in the

defense industry.

 

``Russia had up to now classed inventories as a state secret and its

pending abolishment is expected to show low supplies,'' Hiroyuki Kikukawa,

deputy general manager of research at Tokyo- based commodities trader Nihon

Unicom Corp., said in a telephone interview.

 

Norilsk's palladium stockpiles may stand at about 500,000 ounces, or

less than 10 percent of annual consumption, said Maxim Matveev, senior

equity analyst at Alfa Bank in Moscow. The company last built up inventory

in 2002, after prices collapsed from a record $1,125. Russia had curbed

exports, prompting buyers to turn to platinum.

 

``In 2003, they sold all production,'' Matveev said in an interview.

``In 2004, we don't think they stockpiled.''

 

Inventory in Switzerland may be more than 6 million ounces after four

years of global production surpluses, according to trade data cited by

London-based Johnson Matthey Plc, the world's biggest distributor of

platinum and palladium. South Africa is the world's second-largest palladium

producer, accounting for 39 percent of supply.

 

Slumping Yen

 

The yen's three-day slump against the dollar helped boost palladium in

Tokyo, Kikukawa said. Commodities are priced in dollars on international

markets, making the contracts an attractive proxy for the U.S. currency when

it strengthens.

 

The dollar bought 105.37 yen today, up from 104.39 yen on March 1,

according to EBS, an electronic currency dealing system. The euro was up

against the dollar after a four-day slide, trading at $1.3149.

 

Chinese jewelry buyers who couldn't afford platinum turned to

palladium last year, boosting their consumption of the metal 24-fold to more

than 600,000 ounces, Johnson Matthey said on Feb. 15. Palladium is used in

white gold, an alloy made with gold and silver.

 

Diesel Demand

 

Catalysts in gasoline-fueled cars can use either platinum or

palladium. Vehicles using diesel fuel, which this year may account for about

half of Europe's car market, have needed catalysts manufactured with

platinum.

 

Brussels-based Umicore SA, the world's biggest recycler of precious

metals, said last year it developed technology that will allow as much as a

quarter of the platinum in diesel catalysts to be replaced by palladium.

 

Platinum was unchanged at $866 an ounce in London.

 

Palladium prices will rise as high as $300 an ounce this year and fall

as low as $135, Virtual Metals predicted on Jan. 12. The metal will average

$187, down from $231 last year, the London-based consultant said.

 

Virtual Metals had the most accurate palladium price forecast during

the past two years in the London Bullion Market Association's annual survey.

 

The world's biggest movers are based on changes in price and screened

for the size of the market and amount of daily trading.

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  • 3 months later...

Still in the dog house it seems and for a while yet.

 

QUOTE
MARKET TALK: Palladium Looks Like Risky Play-Analyst 04/07/05 10:38:00

  0038 GMT [Dow Jones] Analyst with big Japanese trading house says palladium
has been riding on coattails of other precious metals, making it look
'deceptively solid'. Warns palladium market still oversupplied, may remain so
for several years to come. Palladium quoted at $178 vs $180 late Friday in New
York. (JSH)
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  • 4 weeks later...

Palladium has definitely turned the corner and snapped its downtrend resolutely. The attached article points to the reasons. No shortage of the stuff but the Russians are supposedly holding it back. Currently trading at US$260 had dropped as low as US$165 earlier this year.

 

http://www.aireview.com/index.php?act=view&catid=5&id=3106

 

NA Palladium has gone on quite a run in the last month. From a low of just above CA$ 5.20 it is trading at around CA$ 9.80. Still plenty of upside in my view.

 

What was that adage about buying in gloom? I only wish I had got some more.

 

Cheers.

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