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There’s no end in sight for soaring #palladium prices, bodes well for North America’s Largest #PGM deposit $ $ $ $ $ $GLEN

Posted by AGORACOM-JC at 11:03 AM on Thursday, October 3rd, 2019

SPONSOR: New Age Metals Inc. The company’s Lithium Division has already made significant acquisitions in Canada and the USA. The company also owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces in the Inferred. Learn More.

There’s no end in sight for soaring palladium prices, bodes well for North America’s Largest Undeveloped PGM deposit

With stocks running low, it is difficult to see where further supplies will come from.  

By: Neil Hume

For nearly 30 years, UK crime-fighting show Police 5 urged members of the public to stay vigilant with the catchphrase “Keep ’em peeled”. It is advice car owners in London might want to consider, especially if they own hybrid vehicles such as the Toyota Prius or Lexus 400.

Looking to profit from soaring palladium prices — which hit a record high above $1,700 an ounce this week — thieves in the UK capital have stolen nearly 2,900 catalytic converters in the first six months of the year, up from 1,674 in the whole of 2018, according to data from the Metropolitan Police.

The market-savvy car thieves typically target hybrids because their catalysts contain more metal. They then sell the devices to illegal scrap dealers for cash. In spite of a collapse in global car sales this year, the metal’s price has risen more than 30 per cent in 2019 to a level far above its long-term average, catching many analysts and investors by surprise. The average price for palladium since 1994, unadjusted for inflation, is just $500 an ounce.

One reason for this apparent paradox is China, where there has been increased demand for palladium ahead of the introduction of a nationwide emissions standard in 2020. Another reason is that stocks are running low. And with few platinum or nickel projects under development, the 7m ounces-a-year palladium market is set to remain tight unless there is an unexpected release of supplies. Yet it is difficult to see where these supplies might come from. Russia’s Norilsk Nickel, the world’s largest producer, raised doubts last week about its ability to replenish its Global Palladium Fund.

Established in 2016, the fund helps stabilise the market, buying metal from various sources, including Russia’s central bank, and selling it to industrial customers. However, analysts believe that Moscow’s strategic stockpile of palladium — a key source of supply — is close to being exhausted, while other holders are reluctant to sell because they expect higher prices. So is there anything that can bring palladium back to earth?

A global recession would certainly hit prices as would a switch by carmakers from palladium to platinum, which is almost $800 an ounce cheaper. For the moment, that looks unlikely because the car industry is treading warily with new catalyst technology in the wake of the Volkswagen emissions scandal. But that could change. One of the oldest sayings in commodity markets is that the cure for high prices is high prices and, as BMO Capital Markets notes, it is rare for any commodity to remain this far above its long-term average for so long.


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