Palladium

Palladium

Postby winston » Sat May 16, 2015 8:24 am

April 9, 2015

IS THIS $2 BILLION BUY A SIGN OF OPPORTUNITY IN PALLADIUM?

Critical item for the global platinum-group metals market this week. Suggesting that big changes may be ahead for buying and pricing in this space.

Major Russian PGM miner Norilsk said in an interview that it is creating an investment fund to buy palladium. Looking to consolidate much of the world’s privately-held stock of the metal under one umbrella.

Norilsk’s head of strategic marketing, Anton Berlin, told Bloomberg that the planned palladium fund will be of significant scale. With managers looking to buy up to $2 billion worth of the metal.

Berlin said some of this supply will be bought from the Russian central bank. While the remainder will be purchased from hedge funds and other holders.

The plan looks to more than just pie-in-the-sky thinking. With Berlin saying that the fund has already secured $1.6 billion in loan funding with an “international bank” in order to make its palladium purchases.

Norilsk itself is planning to contribute $200 million to the fund — with the company’s billionaire CEO Vladimir Potanin also participating privately. Potanin also said that Russian business magnate Roman Abramovich may contribute.

The move would be an interesting one for the PGM market — with the stated aim being to bring more transparency to palladium stockpile levels. Currently, above-ground stocks have proved difficult to assess. Leading to uncertainty about he global supply and demand picture.

If Norilsk does succeed in bringing $2 billion worth of palladium under one roof, investors would likely have a much clearer idea of what’s going on with supply. Potentially revealing that things are tighter than expected in this market.

That’s exactly the sort of scenario Norilsk is anticipating. With the company telling Bloomberg that it expects to see PGM production from major mining centers like Africa decline over the coming years.

If such a scenario materializes, the formation of this palladium fund could turn out to be a pivotal moment for the PGM market. Perhaps signalling an opportunity in the making here.

Source: Pierce Points
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Re: Palladium

Postby winston » Sat May 16, 2015 8:26 am

Heads up... One precious metal has just gone "critical" by Dave Forest

More signs this week that one metal may be a developing sleeper story. With tight supply and shifting market fundamentals coming together (quietly) to create a potential bull run.

That’s in palladium.

Platts reports that precious metals experts GFMS have just flagged a major supply shortage in the global palladium market. With the group estimating that this metal was in deficit by 1.58 million ounces in 2014.

GFMS further noted that this was one of the worst shortages in the palladium market for years. With the group calling last year’s deficit “the most severe market imbalance for more than a decade.”

Notably, analysts here estimate that the palladium market has now been in deficit since 2007. Meaning that we’ve seen seven years of demand running ahead of supply.

That’s a situation unique amongst the metals complex today. With no other commodities having seen a supply shortage running anywhere close to this length.

All of which suggests that major opportunities may be unfolding here. With tightening supply creating the potential to drive prices higher — as with the 30% gains palladium enjoyed in mid-2014, when strikes in the South African mining sector threatened one-third of world supply.

Prices have since levelled off — falling from a high of over $900 per ounce in August 2014, to a current level near $780. But any new threats to supply could trigger another run, given the precarious state of the market.

Threats like attempts by Russia to corner the market with buying through special investment funds — a strategy that’s recently been put forward by top players in that country’s mining industry (see “Is This $2 Billion Buy A Sign Of Opportunity In Palladium?” – Pierce Points: April 9, 2015).

The big question is: how to position for such a move? Toward that end, members of the Pierce Points Discovery Network will be receiving new research next week on global project opportunities in the PGM space.

Watch for these observations on how to profit from this undercurrent trend — and for more events affecting supply in the global palladium space, particularly in top producers Russia and South Africa.


Source: Pierce Points
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Re: Palladium

Postby winston » Sat May 16, 2015 10:58 am

Palladium

Palladium is a chemical element with symbol Pd and atomic number 46.

It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired by her when she slew Pallas.

Palladium, platinum, rhodium, ruthenium, iridium and osmium form a group of elements referred to as the platinum group metals (PGMs). These have similar chemical properties, but palladium has the lowest melting point and is the least dense of them.

Over half of the supply of palladium and its congener platinum goes into catalytic converters, which convert up to 90% of harmful gases from auto exhaust (hydrocarbons, carbon monoxide, and nitrogen dioxide) into less-harmful substances (nitrogen, carbon dioxide and water vapor).

Palladium is also used in electronics, dentistry, medicine, hydrogen purification, chemical applications, groundwater treatment and jewelry.

Palladium plays a key role in the technology used for fuel cells, which combine hydrogen and oxygen to produce electricity, heat, and water.

Ore deposits of palladium and other PGMs are rare, and the most extensive deposits have been found in the norite belt of the Bushveld Igneous Complex covering the Transvaal Basin in South Africa, the Stillwater Complex in Montana, United States, the Thunder Bay District of Ontario, Canada, and the Norilsk Complex in Russia.

Recycling is also a source of palladium, mostly from scrapped catalytic converters.

The numerous applications and limited supply sources of palladium result in the metal attracting considerable investment interest.

Source: Wikipedia
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Re: Palladium

Postby winston » Thu Jun 25, 2015 8:21 pm

Palladium prices sink 11% over the past month.
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Re: Palladium

Postby winston » Wed Aug 05, 2015 8:07 pm

Palladium prices are down 25% in 2015.
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Re: Palladium

Postby winston » Thu Nov 12, 2015 9:23 pm

Palladium breaks down... prices sink 16% over the past month.
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Re: Palladium

Postby winston » Wed Aug 10, 2016 8:28 pm

Palladium at Year High, Driving Precious Metals on Chinese Cars

by Eddie Van Der Walt

Platinum prices also advance to their highest level since 2015
Dollar and outlook for U.S. rates help power precious metals

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... te-outlook
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Re: Palladium

Postby winston » Wed Nov 09, 2016 8:49 am

Palladium Shines

By Eric Fry

Something funny happened on the way to the 2016 presidential election...

During yesterday's trading session, all of the precious metals slumped... except palladium.

In fact, palladium rocketed 5% higher - its biggest one-day gain in nearly a year.

This sparkling performance would have been impressive all by itself. But it was especially impressive alongside the large losses gold and silver suffered yesterday. Platinum also fell. Typically, when the precious metals complex has a bad day, palladium falls in sympathy.

But palladium was utterly unsympathetic yesterday. Instead of falling along with gold and silver, it rallied along with global stock markets.

For this one trading day, palladium behaved like an industrial metal instead of a precious one.

But this industrial metal is becoming increasingly precious.

As you can see in the chart below, demand has been climbing steadily higher for more than a decade, while the mined supply of palladium has been ratcheting lower. As a result, the gap between the two has widened significantly.

Palladium Shortage

Let's take a closer look at the demand side of this imbalance. The story here is pretty simple. The global auto industry consumes all of the newly mined supplies of palladium each year. As a percentage of the total palladium supply, which includes recycled metal, the automotive industry consumes 80%.

Exhausting Supply

During the last 10 years, demand for palladium from the auto industry has more than doubled. And according to Johnson Matthey, palladium demand will continue to climb as global vehicle production increases about 3% per year over the next four years.

China is a big part of the reason why. By itself, China has accounted for a whopping 80% of the growth in global auto sales during the last decade.

And even though the Chinese economic engine has been downshifting for the last several months, auto sales in the country continue to motor along in high gear.

New car sales in China during the last 12 months are up more than 10% over the prior year and double the number sold in 2009.

12 Month Total of China Car Sales
Even after this car-buying binge, the Chinese market is far from tapped out. Only 1 in 10 Chinese adults owns a car, compared to 5 out of 10 in Japan and 6 out of 10 in Europe. So Chinese auto sales are almost certain to remain on their steep upward trajectory for many years.

The resulting demand for palladium is the main reason why the price of this precious metal is likely to move steadily higher. But the fragility of the global palladium supply is the main reason why its price could rocket higher at any time.

Two countries - Russia and South Africa - produce three-quarters of the world's mined palladium supply. Both are struggling to maintain output. Their combined production peaked in 2006 and has been trending lower ever since.

Palladium Production in South Africa & Russia

The slumping output from these two major producers is why GMK Norilsk Nickel PJSC (OTC: NILSY), the world's largest palladium miner, believes the palladium market is heading toward its eighth annual supply deficit in 2017.

Even in the best of circumstances, the mined supply of this essential metal is unlikely to increase over the next few years. But the mined supply could decrease sharply at any time.

2014 provided just a glimpse of how quickly supply shocks can occur in the palladium-mining industry. In January of that year, nearly 70,000 South African miners went on strike at the country's platinum/palladium mines. The strike, which lasted five months, was the largest one in South African history. As a result of this work stoppage, both palladium and platinum posted supply deficits of more than 1 million ounces in 2014.

That strike is over, of course, but South Africa's chronic labor strife is a recurring threat to the country's palladium production.

It bears mentioning that palladium mines are not the only source of supply. If they were, the palladium price would have rocketed higher a long time ago. There is one additional major source of supply: recycled goods, especially of catalytic converters.

According to the latest data from GFMS, newly mined palladium provides nearly 80% of total supply, while recycled metal provides about 20%.

Back in 2009, auto catalyst scrap provided about 16% of total supply. So its contribution has inched up over the years. But since this metal derives from recycled scrap, there is a limit to the supply that can come to market.

Bottom line: It's easy to imagine an intensifying supply and demand squeeze coming our way.

No commodity market can operate in deficit forever. Eventually, the stockpiles become exhausted. Eventually, prices rise enough to dampen demand and "cure" low prices.

This bullish trend appears to be underway, as palladium is up more than 40% from its January low, and the shares of most palladium and platinum mining companies are also up substantially. The stock of U.S.-based Stillwater Mining, for example, has more than doubled since January.

Investors who'd like to add some palladium to their portfolios could purchase the ETFS Physical Palladium Shares ETF (NYSE: PALL). This ETF stores physical palladium in Zurich, Switzerland. It also stores some of its palladium in vaults in London.

Source: The Non-Dollar Report
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Re: Palladium

Postby winston » Sun Dec 25, 2016 3:12 pm

The picture looks brighter for palladium:

Palladium has outperformed all other precious metals this year and tends to trade independent of the rest of the precious metals complex.

It is impacted more by industrial demand and less by monetary policies and risk sentiment.

A sharply widening deficit according to our supply/demand model is likely to propel palladium higher as scope for mine output remains limited and industrial and auto demand firm.

A cessation in the heavy ETF selling of 2015 and 2016 will afford palladium the opportunity to rally.

Palladium may also benefit from any wider investor return to safe-haven assets in 2017.

Source: Barron's
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Re: Palladium

Postby winston » Sun Jan 22, 2017 8:44 pm

Palladium…That Other Precious Metal

By Johanna Bennett

Is the palladium rally running out of gas?

After running strong in 2016, outperforming gold and other precious metals, palladium prices have climbed another 15% since the start of the year.

Today, future contracts for March delivery have surged from an intraday low of $751 early this morning to peak at $794.15. At a recent $788.15, the contracts had risen almost 4.9% in recent market action.

Gold futures, meanwhile, inched 0.4% higher to $1,205.80.

It’s a boon for the ETFS Physical Palladium Shares (PALL), which rose 4.56% today to trade at $75.49 a share, making it one of today’s biggest gaining exchange-traded funds.

Why the rally? Used to make automobiles, global demand for palladium is rising, yet the supply had stagnated. HSBC’s James Steel calls it the “standout metal.”

But some market observers worry that prices may hit key resistance levels , on a technical grounds.

As Investing.com writes:
…The support which was broken in June 2015 is now acting as a major resistance. More than twice it has tried to break these levels but failed to do so.

In case it breaks this resistance then the next hurdle will be around $800.00 and $830.00 price range. If the price doesn’t break, the present resistance levels then one can expect it to come around the major support which is at $670.00 to the $680.00 per troy ounce.

Source: Barron's

http://blogs.barrons.com/focusonfunds/2 ... yptr=yahoo
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