Palladium rises above the USD 1,000 mark due to supply concerns – Commerzbank
13.09.2024, 14:20

Palladium rises above the USD 1,000 mark due to supply concerns – Commerzbank

The Palladium price has risen by 8% since Wednesday, surpassing the $1,000 per troy ounce mark for the first time in two months, Commerzbank’s Commodity Analyst Carsten Fritsch notes.

The bullish price reaction seems justified

“At $1,060, the price reached a five-month high in the morning. The trigger for this development was Russian President Putin's comments about possible export restrictions on certain metals in retaliation for Western sanctions. Although Palladium was not explicitly mentioned, Nickel was. Since Palladium is a by-product of Nickel in Russia, Palladium would be indirectly affected if Russia were to reduce Nickel production as a result.”  

“There has been speculation since the beginning of the war in Ukraine 2 ½ years ago about possible Russian retaliatory measures to Western sanctions, and Palladium has often been the focus of attention. With around 40% of global mine supply, Russia is the most important Palladium producer, just ahead of South Africa. A reduction in Russian supply would therefore quickly lead to a shortage in the market.”

“The fact that this has not happened so far should not be taken as a guarantee for the future. The Palladium market would therefore be advised not to ignore this risk completely. The price reaction is therefore justified, even though it was probably also influenced by the covering of short positions.”

 

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