(Click on here for an interactive chart of palladium costs)
Moscow-based Nornickel is the world’s largest producer of palladium and platinum, each of that are utilized in catalytic converters to scrub automobile exhaust fumes.
Russia produced 2.6 million troy ounces of palladium final yr, or 40% of worldwide mine manufacturing, and 641,000 ounces of platinum, or about 10% of whole mine manufacturing.
Whereas it was “nonetheless too early” to inform if provide points would materialize, “if we see a set of sanctions that scale back financing and free stream of the fabric to the remainder of the world, we might see a major tightening of situations for palladium most likely within the not too distant future,” stated Bart Melek, head of commodity methods at TD Securities.
Platinum group metals might see a “fairly important rally” with palladium more likely to attain document highs seen final yr over $3,000 an oz, Melek added.
It’s a pointy reversal in fortunes for palladium, which was the worst-performing main commodity in 2021. The affect of the semiconductor shortage on automobile manufacturing soured the demand outlook, inflicting costs to plummet within the second half of the yr. Solely iron ore, hit by China’s property market disaster, and silver have come shut by way of losses.
Shares in mining corporations with operations in Russia had been among the many first to really feel the affect of Moscow’s wide-ranging assault on Ukraine on Thursday, whereas oil topped $105 a barrel and buyers rushed to purchase gold and different secure havens.
Learn extra: Russia-focused miners collapse on Ukraine invasion
(With information from Reuters and Bloomberg)
