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Anglo American chief ‘surprised’ by #palladium bull market – SPONSOR: New Age Metals $ $ $ $ $ $GLEN

Posted by AGORACOM-JC at 2:48 PM on Tuesday, February 4th, 2020

SPONSOR: New Age Metals Inc. The company 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 Inferred. Learn More.

Anglo American chief ‘surprised’ by palladium bull market

Neil Hume in Cape Town

  • The bull market in palladium has come as a surprise to the chief executive of Anglo American, one of the world’s biggest producers of the metal.

In an interview with the Financial Times, Mark Cutifani said he had not anticipated the barnstorming performance of palladium, which has surged 75 per cent over the past year to around $2,400 an ounce.

“Am I surprised prices have risen to this degree? Yes. And the reason is I thought there would be more substitution [from carmakers] back to platinum,” he said. “It will still happen over time. I have not changed my view. What I underestimated, very clearly, was the focus on the automakers have on making sure they manage emissions.”

In March 2018 Mr Cutifani said the rapid rise in the precious metal’s price has created a “bubble” but that its value was likely to remain high for some time. At that point palladium was trading at around $1,350 an ounce. The price subsequently rose as high as $2,555 before dropping back to about $2,400 today.

Palladium is a vital ingredient in catalysts for petrol and hybrid cars that convert toxic emissions such as carbon monoxide and nitrogen oxide to carbon dioxide, water and nitrogen. Demand for the metal has increased due to tightening emission standards in the automotive industry, particularly in China, that require more of it to be used in car catalysts.

“The way I put it, the CEO of an auto company won’t get fired for spending $20 on a vehicle on a bit more palladium. What they might get fired for is not meeting their emissions targets. That’s the critical issue,” said Mr Cutifani. After nearly a decade of undersupply the market is now critically short of palladium and scrambling to find new sources of supply.

It has also sparked a crime wave with thieves in London jacking up cars to steal the catalytic converters, which are then sold to scrap metal dealers for cash. Production of palladium is constrained because it is mined as a byproduct of platinum and nickel — commodities where new projects have been few and far between.

“What people are learning is that you can’t just turn its [supply] on and off. It’s not a flick of the switch. Mines take a long time to develop. Now, are we reacting, yes . . . but it takes a bit of time.” Additional reporting by Harry Dempsey in London.


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