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The bottom is in for the sector...
Palladium has held up better than any metal this year...
Bullish news keeps rolling in...
Norilsk sees palladium output flat in 2013
Jan. 30, 2013, 3:00 a.m. EST
By Clementine Wallop
http://www.marketwatch.com/story/norilsk-sees-palladium-output-flat-in-2013-2013-01-30
Focus: Palladium Surges To 16-Month High; Analysts See Further Gains In Tight Market
28 January 2013, 12:19 p.m.
By Allen Sykora
Of Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/KitcoNews20130128AS_focus.html
It broke all right... Onward!!!
$700 is the mark to beat and hold...
Link to videos on Palladium:
Radomski: Platinum & Palladium - A Nice Addition to Your Precious Metals Portfolio
Wednesday November 21, 2012 10:25
http://www.kitco.com/ind/Radomski/20121121.html
Yesterday was a good day for the whole precious metals sector – all important assets rallied sizably with the USD Index declining 0.38 (0.47%). It seems that the brief consolidation that we saw in the last couple of days is either over or almost over and the whole sector is poised to move higher.
In our last essay we wrote a lot about the importance of diversification and we believe it is a good idea to continue this thread a bit more in today’s essay as well. And this is why we would like to draw your attention to two precious metals that seem to be in gold and silver’s shadow, as we think they provide good investment opportunities. So, in order not to put all our eggs in one basket, let us move on to the technical part of today’s essay and have a look at platinum and palladium that didn’t lag behind the more renowned precious metals yesterday – we’ll start with platinum’s short-term chart (charts courtesy of http://stockcharts.com.)
In the chart, we see that prices have broken above the declining resistance line. We saw three consecutive closings followed by a move back to this line, which was immediately followed by a pullback. And yesterday’s price action is reassuring with platinum closing at almost $1584. At this time, the breakout has been confirmed and higher prices should now be expected.
Let us now move on to the second hero of today’s essay – palladium.
In this chart the situation looks promising as well. Prices not only moved back above the declining long-term resistance line but also moved above the short-term declining resistance line. Therefore, the short-term implications are also bullish here which was further confirmed yesterday, as the ETF closed at over $63.
Summing up, both platinum and palladium can be seen as a decent addition to a precious metals investor’s portfolio, as their upside potential is tempting and they are good for diversification purposes. Moreover, these metals suggest higher prices across the precious metals sector.
Thank you for reading. Have a great and profitable week!
Hedge Funds Returning to Palladium as ETPs Retreat: Commodities
By Nicholas Larkin and Debarati Roy - Oct 30, 2012 12:38 PM ET
http://www.bloomberg.com/news/2012-10-30/hedge-funds-returning-to-palladium-as-etps-retreat-commodities.html
A great source for platinum news:
http://platinuminvestingnews.com/
All the futures boards are for metals discussion NOT individual stocks. Period.
$PALL w/ a HUGE day!!!
$PALL is holding well lately with the PGM's.
PGMs have been holding up well the past 6 months despite the PMs getting beaten down.
Do you think it's going to keep going up or pull back a bit?
Analysts: Record Age Of U.S. Autos Portends Pent-Up Demand For PGMs
20 January 2012, 2:11 p.m.
By Allen Sykora
Of Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/KitcoNews20120120AS_pgms.html
(Kitco News) - The average age of automobiles on American roads has hit a record high, and analysts say this could be a harbinger of pent-up U.S. demand for vehicles and by extension for platinum group metals.
Still, while this is price-supportive, they say, the bigger key for the metals during 2012 will be the demand that emerges from developing nations such as China.
Polk, a global automotive-market research firm based in Southfield, Mich., issued a report this week saying that the average age of cars and light trucks in operation in the U.S. hit 10.8 years in 2011, a record high. This is up from 10.6 years in 2010.
The average vehicle age has been increasing “quickly” over the past five years, Polk said. It had stood at 9.8 years in 2007, the year before the financial crisis hit. Polk compiles the data based on analysis of national vehicle registration data.
Several analysts and traders told Kitco News that the report reinforces what the market already knows—there has been a significant decline in U.S. auto sales during weak economic conditions in recent years. This had ramifications for platinum group metals, since their main industrial use is catalytic converters.
But motor vehicles only last so long and eventually have to be replaced, meaning potential for a spurt in PGM demand at some point in time.
“That study shows there is some pent-up demand, and that’s going to be a tailwind for consumer auto sales in 2012 and 2013,” said KC Chang, senior economist who tracks platinum group metals for the consultancy Global Insight.
Rohit Savant, senior commodities analyst with CPM Group, said the pent-up demand was already reflected by increased auto sales during 2011, even though the economy remained on soft footing.
Global Insight’s IHS Automotive unit has projected U.S. sales of cars and light trucks in 2012 of 13.5 million units, which would be an increase from 12.7 million a year ago, Chang said.
“So these statistics (on record vehicle age) show there is a replacement cycle that needs to go through in the next 12 to 24 months,” Chang said. “But with that said, it’s still weak. The auto industry is still not out of the woods.”
Prior to the financial crisis, sales tended to be 15 million to 17 million units a year.
“We’re still below the historical trend,” Chang said. “But you could say there are green shoots in terms of consumers coming back into the market. It’s because you can’t really extend the cars’ lives that much longer. We’re already at historical highs, so you’re going to see some people come back into the market.”
Still, any improved U.S. demand for cars is only one part of the puzzle for PGMs, analysts said.
“On balance, it (aging U.S. cars) is a bullish factor for PGMs,” said Bill O’Neill, one of the principals with LOGIC Advisors. “The real key is an overall economic recovery that includes the U.S., Europe and Asia, and in particular demand for cars in India, China and other developing nations. I would be optimistic on that type of demand.”
Chang’s firm looks for a mild recession in Europe this year, with near-zero growth in auto sales. However, China’s economy has continued to grow, although at a slower rate. The country has become the world’s largest auto market and tends to rely upon gasoline-powered engines that can use palladium, which is far less expensive than platinum.
“In terms of global palladium demand, it still hinges upon emerging markets and how you see (sales of) consumer autos developing in those economies,” Chang said. He later added: “We think platinum and palladium prices are going to be moving upwards over the second half of this year. The statistics (on aging U.S. cars) is a tailwind for this growth, although improvements in the U.S. auto sector may not be the primary source of stronger platinum and palladium prices in 2012.”
An aging U.S. auto fleet also has ramifications for secondary, or recycled, supply of PGMs, analysts said. A trader said scrapping of cars presumably means more recycling of PGMs. However, newer vehicles tend to have higher PGM loadings to meet more strict emissions standards, CPM Group’s Savant said. So when the older vehicles are eventually scrapped, they result in less secondary supply than otherwise might have been the case, he explained.
By Allen Sykora of Kitco News; asykora@kitco.com
Scoreboard for the week: +6.24%
That's okay. I'm holding and adding a little.
Nothing exciting during holiday time...
It's bouncing back. Market seems a little more stable these days, too. All good signs. I just kept plugging money regularly into the fear and it's- so far- paying off.
Pd looking better since the recent October low...
Going to get worse, too. Waiting for a buying opportunity.
Yesterday was a really hard smackdown: -3.76%
For the week: +4.15%
UPDATE: Johnson Matthey: Record Demand Pushes Palladium Market Into Deficit In 2010
16 May 2011, 01:16 p.m.
By Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/KitcoNews20110513ASKN_jm_pall.html
(Kitco News) -(Updating with eighth graph comparing Johnson Matthey findings with those of GFMS earlier this month)
Global palladium demand hit a record high in 2010, enabling the market to post its first supply/demand deficit in a decade, Johnson Matthey reported Monday.
Palladium use last year rose 23% in 2010 to 9.63 million ounces, leaving the market in a deficit of 490,000 ounces, Johnson Matthey said in its “2011 Platinum” report. By contrast, the market had been in a surplus of 680,000 ounces in 2009.
In fact, the deficit in 2010 was the first for palladium since the year 2000, said Tim Murray, general manager of precious metals marketing for Johnson Matthey.
The increased demand was mainly the result of strong purchases from the automotive and physical-investment sectors, the report said. This resulted in a market deficit even though global mine supplies of palladium rose by 190,000 ounces to 7.29 million ounces last year. Russian mine supplies increased by 2%. Meanwhile, recycling levels increased by almost a third to 1.85 million ounces.
Sales of palladium from Russian state stockpiles were once again around 1 million ounces, Johnson Matthey said.
Johnson Matthey forecast price to be between $715 and $975 over the next six months. The average for this period is forecast at $825, compared with an average of $762 in the six months to the end of April.
“Supplies of palladium are expected to decline in 2011, with lower sales from Russian state stocks more than offsetting an increase in output elsewhere,” Johnson Matthey said. “Demand in the automotive and industrial sectors is expected to continue to grow this year and even if there is no repeat of the exceptional levels of physical investment demand for palladium seen in 2010, the palladium market is likely to be in deficit again.”
GFMS also reported a market deficit earlier this month of 551,000 ounces. However, this consultancy calculated its surplus before investment demand and the supply from Russian stockpiles. When including these, the GFMS “residual” deficit was 785,000 ounces.
Demand For Palladium In Auto Catalysts Rises 35% In 2010
Higher global production of light-duty passenger vehicles, along with tightening emissions legislation in some markets, boosted auto-catalyst demand for palladium by 35% to 5.45 million ounces in 2010, Johnson Matthey said. Rapid growth in the light-duty sector lifted automotive palladium demand in China by 42% to 975,000 ounces.
Gross demand for other industrial of palladium was 70,000 ounces higher at 2.47 million ounces, the report said.
“Use of palladium in the chemical industry rose by 22% as consumer demand for plastics led to significant capacity expansions and greater utilization of existing facilities,” Johnson Matthey said. “Dental demand for palladium softened but electrical demand increased.”
Meanwhile, jewelry demand for palladium slid last year but physical investment hit a record high.
Gross palladium demand in the jewelry sector fell by 20% to 620,000 ounces, largely due to a decline in manufacturing of palladium jewelry in China. This more than offset an increase in the manufacturing of palladium jewelry in Europe and North America, Johnson Matthey said.
Identifiable physical investment demand for palladium grew by 74% to 1.09 million ounces in 2010, with heavy buying of metal after the early-year launch of a U.S.-based exchange traded fund.
As is the case with platinum, Johnson Matthey anticipates that palladium ETF holdings will grow again in 2011, although likely not at the dramatic pace of last year when it benefitted from pent-up demand after the launch of the first U.S.-listed palladium ETF.
Lesser Russian Stockpiles Sales To Continue In 2011, Then ‘Nearing The End’
The 2011 Platinum report looks for sales from Russian stockpiles to be “several hundred thousand ounces” this year, down from the roughly 1 million last year. This has been a key focus for the palladium market for some time now, with some analysts wondering if Russia has about depleted its state stockpiles.
“There are going to be some sales this year, based on some of the information that has come out of Russia,” Murray said.
“However,” he later added, “we think it’s probably going to be less than what it was last year. And...it’s pretty clear we’re nearing the end of Russian stockpile sales. It’s just a question of when we’re going to see it.”
Sales are expected yet this year, however, after the Russian press reported in late April that the country would be selling some $366 million worth of metals and diamonds, Murray said. “We’re assuming a large proportion of that will be palladium.” However, Norilsk Nickel has suggested this will be the last year that substantial quantities of stockpiled palladium comes onto the market.
By Allen Sykora of Kitco News; asykora@kitco.com
GM increases production, will increase workforce by 4200, invests in plants. Good news for Pd.
http://money.cnn.com/2011/05/10/autos/gm_toledo_jobs/index.htm?iid=HP_River
Good article. Thanks. A number of forecasts that the Russian reserve of Pd is nearly exhausted have come out over the last several weeks.
‘Large’ palladium deficit expected, platinum in surplus
http://www.miningweekly.com/article/large-palladium-deficit-expected-while-platinum-remains-in-surplus-2011-05-05
By: Brindaveni Naidoo
5th May 2011
JOHANNESBURG (miningweekly.com) - Platinum is expected to remain in a surplus this year, while palladium – which is increasingly being used as a substitute for platinum – would see a “large” deficit in 2011, precious metals consultancy GFMS reported on Thursday.
Platinum registered a surplus of almost one-million ounces in 2010, marking the sixth consecutive year of a gross surplus, while sister metal palladium’s deficit returned to a “sizeable” level of 550 000 oz.
The platinum surplus rose 10% from 876 000 oz in 2009 to 962 000 oz in 2010, and also marked the highest level in GFMS’ 12-year data series.
GFMS also reported that, for the first time in four years, platinum output from South Africa - the world’s number-one platinum producer - increased by 3%, which it attributed to a release of metal from the process pipeline.
GFMS executive chairperson Philip Klapwijk said, at the launch of the ‘Platinum & Palladium Survey 2011’, that platinum would remain in a surplus in 2011 owing to an expected increase in mine output as a result of forecast gains in North America and an expected increase in jewellery and autocatalyst scrap.
Demand would grow but only modestly, GFMS predicted, as disruption in quake-hit Japan, slow diesel sales and substitution limit autocatalyst demand and the price-constrained jewellery demand.
Klapwijk is forecasting platinum prices “comfortably north” of $1 900/oz by year-end. The metal traded at $1 798/oz on Thursday.
For 2010, he pointed out that despite a decent rise in fabrication demand as the world economy started to recover, there was an even greater platinum supply response, partly as a result of firmer platinum prices.
A key contributor to demand for platinum, which increased to 6,73-million ounces, had been as a result of the 16% increase in autocatalyst fabrication.
However, autocatalyst demand at three-million ounces remained well below precrisis volumes owing to a sluggish recovery in Europe’s diesel sales and further thrifting and substitution to palladium.
The higher autocatalyst demand spurred the return of palladium to a gross deficit last year. Autocatalyst demand for the metal was at a ten-year high of 1,2-million ounce owing to car sales rebounding in palladium-focused markets, particularly gasoline, and the substitution of palladium in diesel.
For palladium, despite a 40% increase in the supply of jewellery scrap to 163 000 oz, demand for jewellery decreased by 27% to 809 000 oz, mainly owing to losses in China.
In contrast, on the demand side for platinum, heavy price-led losses in Chinese jewellery demand fed through to a 17% drop to 1,89-million ounces. Old jewellery scrap supply increased by 30% to 603 000 oz.
The fact that platinum prices rose in 2010, despite another surplus, was attributed to sustained investment, with the launch of the ?rst-ever US exhange-traded funds (ETF) and the marked rise in total ETF holdings singled out as causes.
“Platinum, along with the other precious metals, did benefit from a range of factors, such as low interest rates, in?ation fears, Eurozone sovereign debt travails and quantitative easing in the US,” Klapwijk said.
He stated that investment in ETFs should remain signi?cant in 2011.
“Sales from Russian government reserves should also again feature in 2011, although thereafter only residual volumes were expected as this sales programme winds down.”
Palladium prices could reach as high as $975/oz this year, Klapwijk stated.
Edited by: Mariaan Webb
-2.74% is the scorecard for the week...
Reviewing the week: +2.63%...
My friends, for the week: +0.42%!!!
The highest price in years: $818.65.
Gold in Three Currencies
http://www.kitco.com/ind/TimWood/dec082010.html
By Timothy Wood
Dec 8 2010 11:49AM
http://www.minefund.com
ST. LOUIS (MineFund.com) -- Investors in precious metals are entering a very interesting phase in the current bull market, which must be considered continuous over the last decade despite the rude but brief interruption of the global credit crisis.
Significant milestones:
Gold
1 - Crowdsourcing has been powerful for 2010 - the collective brain of the LBMA analysts has achieved a forecasting accuracy score of 96% for the year-to-date.
- Tom Kendall of Credit Suisse has an astonishing accuracy score of 99.3%, but he’s being chased hard by Ross Norman of Fast Markets (98%).
2 - The monthly average gold-silver ratio has dived to its lowest level since February 2007, averaging 48:1 so far this month.
- The previous lowest level of 47:1 from December 2006 looks in danger. The next stop after that is 44: 1 recorded in February 1998. Thereafter, it’s uncharted territory until 1985.
3 - Monthly average gold prices have taken out the prior bubble low. In May 1980, gold prices - adjusted for inflation - had tumbled to $1,361/oz. That was off the all-time high of $1861/oz averaged in January 1980, and before recovering to average $1,738/oz for September 1980. The latter is the next significant technical level for real gold prices.
- The real gold price averaged $1,356/oz over November 2010, and is currently averaging 1398/oz for December.
4 - Gold priced in a basket of commodity currencies is within 2% of taking out the all-time inflation adjusted high. The MineFund World Gold Price Index (January 2010 = 100) all-time high is 129 from January 1980 compared with the current value of 127 for December. Put another way, those currencies could exceed what has always been regarded as the most spectacular bull market in gold. That is despite them gaining significantly against the dollar in recent months.
- It is not as positive for the leading global currencies though. Gold priced in a basket consisting of the US dollar, euro, yen, Swiss franc, Canadian dollar, Australian dollar, and Hong Kong dollar is still 60% shy of its all-time high from January 1980. However, the decline of the euro has accelerated again and we expect the gap to tighten quickly.
5 - Gold priced in euros has put together 11 consecutive days above €1,000/oz. That’s the best performance since June of this year when the Greek crisis was most intense. There is every reason to believe the euro will continue to weaken in the absence of evidence that the contagion has been contained.
- Euro gold has offered the best return for gold bugs rising 41% for the year-to-date, a 10 point advantage over dollar gold.
6 - Gold priced in Sterling has breached £900/oz on consecutive days for the first time, and looks very capable of piercing £1,000/oz.
- Sterling gold is second to euro gold with a 35% return year-to-date.
7 - Yen gold has returned the least, though it still outshines most other assets, with a 16% y-t-d return. Australian dollar gold is the runner up with a 19% gain for 2010.
8 - Equities are softening again relative to gold.
- The S&P500 is trading close to the March 2009 low (in the current cycle) of 0.87x.
- The Dow is likewise struggling at 8.11x the gold price, which compares very favorably with the March 2009 low of 8.13x.
Silver
1 - The LBMA analyst peer group has achieved an average forecasting accuracy score of 90%.
- The best silver forecaster is Fred Panizzutti of MKS Finance, followed closely by Mike Ludwig of BNP Paribas.
2 - Monthly average silver prices are within range of topping a major inflation-adjusted technical level at $30/oz. The last time silver prices - in January 2010 dollars - averaged $30/oz for an entire month was February 1983.
- The next significant level is $52/oz which was averaged in September and October 1980.
3 - Silver priced in a basket of leading currencies looks ready to make the same challenge to the February 1983 levels, but it is grossly short of where it traded in September 1980. The MineFund World Silver Price Index traded at 320 compared with 172 for December to date.
4 - Silver priced in commodity currencies is doing far better, and could take out the October 1980 high having already surpassed the 1983 levels. The MineFund Commodity Silver Price Index hit 189 in October 1980 compared with 171 for December so far.
5 - Euro silver has nearly doubled so far this year, strongly outperforming every other currency. Sterling silver has returned 82% so far.
6 - Once again, the yen has been the least attractive currency in which to own silver, but it has still risen 59% for the year. Notably, you could have bought yen silver as late as August and achieved the same return.
Palladium
1 - Palladium prices have blindsided most of the LBMA analysts who were very cautious for 2010. Even so, they have so far managed to achieve a forecasting accuracy of 78% for palladium prices.
2 - Palladium is right back in its previous bubble range, and is close to taking out the previous high from June 2001 when the monthly average was $747/oz.
- The metal has now risen 4.5 fold since it bottomed out at $164/oz over December 2008, and remains the best performing metal since the global credit crisis abated.
3 - The all-time inflation adjusted high is a monthly average of $1,289/oz recording over January 2001.
Platinum
1 - Platinum has been a relatively poor performer and remains below its April 2010 highs. It has averaged $1,694/oz so far this December compared with a real average of $1,706/oz in April.
2 - It is within reasonable striking range of its all-time inflation-adjusted high of $2,077/oz set in March 2008.
3 - The platinum:palladium ratio continues to dive and is at levels unseen for a decade.
Timothy Wood
http://www.minefund.com
No stopping semi precious metals either.
And run it did: Headline... Palladium outshines platinum
http://www.ibtimes.com/articles/20100917/palladium-outshines-platinum-global-auto-sector-china-european-market.htm
17 September 2010 @ 08:02 am EDT
Riding China's auto craze, palladium is putting on its biggest show of outperformance against platinum in over six years.
During teh past few months, CHina has been showign its clear dominance in the global auto sector that is only likely to strengthen now on.
The price of palladium, mainly used in auto catalysts to reduce vehicle emissions, has risen more than 35 percent this year to top $570 per ounce, driven in part by the proliferation of exchange-traded funds backed by physical metal that has sparked unprecedented demand for the platinum group metals.
Both platinum and palladium are used in vehicle catalysts in varying quantities. Catalysts in diesel engines tend to take a higher loading of platinum, while palladium is more abundant in catalysts for gasoline engines.
China, a largely gasoline vehicle market, now ranks as the world's largest and fastest-growing, and palladium simply mirrors that dominance over sister metal platinum, which depends more on the flagging European market for sustenance.
Now, China has become the engine for the world economy. Palladium's outperformance over platinum just reflects it.
All together, until the crash, the US consumer was the motor of the world economy. Now, it's the Chinese economy that has become the motor.
Less-stringent vehicle emissions legislation in China also favours sales of gasoline-powered cars, while Europe imposes ever-tighter controls on climate-warming emissions that results in more use of diesel vehicles.
Apart from that, auto sales have been declining year-on-year in Europe as a number of government incentives to boost consumer spending during the financial crisis expire.
Registrations of new cars in 27 member states of the European Union declined for the third consecutive month in June by 6.9 percent, with 1.341 million units registered, according to figures from the European Automobile Manufacturers' Association.
In the same month, total Chinese auto sales were up 48.2 percent at 1.04 million vehicles. Platinum has not only been eclipsed by palladium this year.
Gold, which hit record highs this week, has gained more than 15 per cent so far this year, while platinum is up almost 9 percent, trading around $1,598 an ounce.
Although more ETFs are widely expected to come to market in coming years, that explosion in demand for platinum is unlikely to repeat itself to the same extent.
Also, a concern for both metals is the robustness of the global auto sector, despite China's growing power in that industry, especially in an environment where investors and companies alike are cautious about the outlook for growth.
Copyright CommodityOnline All rights reserved.
Set to run again seemingly.
The uptrend is still in effect on the weekly chart.
From Bracelets to Pollution Fighter to An Iron Man's Heart, Palladium Gains Allure
http://www.kitco.com/reports/terry_june42010.html
4 June 2010, 9:59 a.m.
By Terry Wooten
Of Kitco News www.kitco.com
New York -- (Kitco News) --Palladium may not have the mystique of gold but it's gaining exposure as a fundamental industrial metal for automobile catalytic converters, as an investment instrument, as jewelry and now as one of the key elements in a popular science fiction movie.
As a metal, palladium has to compete with gold, silver, platinum and rhodium on several fronts, but its proponents feel it is making progress.
North American Palladium LTD of Toronto, Canada, operates one of only two primary palladium mines in the world. Jeff Swinoga, the company's Chief Financial Officer and Vice President-Finance, was one of the presenters at the 10th Metals and Mining Industry Conference sponsored by the New York Society of Security Analysts on Wednesday. NAP operates Lac Des Iles (LDI) palladium mine in Ontario, Canada and has the Sleeping Giant Gold Mine in Quebec. LDI has been producing palladium since 1993 and is one of only two primary palladium mines in the world.
Palladium is used in automobile catalytic converters, along with platinum and rhodium; and has become popular in recent years for jewelry, Swinoga said in an interview with Kitco News on the sidelines of the NSSA conference. It's less expensive than platinum, thus one of its good points. There is only 6 million ounces of annual global palladium production, with 45 percent coming from Russia, 41 percent from South Africa and 11 percent from North America, Swinoga said, citing figures from the CPM group.
In the current environment, production growth in both South Africa and Russia is uncertain, Swinoga said. The best way to increase production, he said, is through higher prices.
"Higher prices will promote development of mines in South Africa and higher prices will give more organic growth to projects that are near existing projects," he said.
Palladium was trading on the physical market Friday morning just below $440 per ounce. Johnson Matthey, the United Kingdom-based metals company, said last month in its annual survey that palladium could go above $700 an ounce later this year. The company said this was predicated on investors continuing to build on their large futures and ETF positions and on recovering industrial and automotive demand. Palladium prices, however, have dipped below the $475 level which Johnson Matthey said was unlikely.
Investor concern about South Africa , however, could hinder capital flow going into new production there, Swinoga said. One big concern is about electricity.
The country’s state owned company, Eskom, generates 95% of South Africa’s electricity as well as two-thirds of the electricity for the African continent. Eskom has 36 200 megawatts (MW) of net generating capacity, of which 32 100MW is coal-fired (90%). In 2008, due to the unavailability of coal and to a delay in new power stations being built, Eskom declared force majeure in turn affecting the mining industry and causing a spike in the price of palladium, platinum and rhodium.
During the load shedding of 2008, platinum went from $1700 to $2100, palladium from $390 to $560, and rhodium hit $10,000.
"Power is a key consideration," he said, because of the necessity to ventilate and refrigerate the air that goes down the deep and massive shafts. "Not only do you have to have a power source, you have to have a reliable power source because there are human lives down there," he said. "Going down to 100 meters or more the temperature actually increases to something like to 60 degrees Celsius."
The government and Eskom are taking steps to increase power production, trying to generate more revenue.
"So they are playing catch-up, and this will allow them to build more power plants," Swinoga said. "But of course it takes time to do that."
Investors are also concerned about higher royalties and the political environment in South Africa, he said. Even though the political situation in South Africa has gone well, "there are still special interest groups that could potentially call for nationalization of some of these mines," he said.
"So when you are looking as an outside investor you have a number of concerns about putting capital into his country," Swinoga said.
Concerns about Russia used to center on how much of a strategic stockpile the country had. Back in the 1980s, it was around 14 million ounces. Sources indicate Russia no longer considers palladium a strategic metal, and indicate the stockpile has probably dropped to around 1 million ounces.
"Whenever you have a stockpile there is the fear it will come to market and hit palladium prices and drive them down," Swinoga said. "I don't think we should be concerned about Russia stockpiling."
In the industrial sector, palladium is pitted mostly against platinum for catalytic converters. The price differential has helped palladium gain on platinum in this area. Platinum physical prices early Friday were around $1,520 .per ounce, compared to about $440 for palladium.
"It's really been a price-determining factor to use more palladium in catalytic converters because it is less expensive e than platinum," he said. Also, it is better for gas vehicles There are reports they are migrating more to palladium for diesel because of the low sulphur they have."
Automobile demand in the so-called BRIC countries--Brazil, Russia, India and China--will continue to support palladium. He noted the China demand in particular as a factor favoring palladium.
"Demand will be predicated on light vehicle production ad in emission standards control," Swinoga said.
The increase in industrial trucks will be important, too, he said, because they need more palladium in their catalytic converters. Light vehicles use about 4 grams of palladium in their emission control devices, while larger vehicles such as a Ford F-150 or a Chevrolet Silverado use about 16 grams. "So the loading of palladium quadruples for the average vehicle with bigger motors," Swinoga said.
Having jewelry in jewelry showrooms and the growth of exchange traded funds (ETFs) has given palladium a lot of exposure, he said. Jewelry stores have begun to market the amount of palladium in a ring or bracelet, making it more likely it might be kept for investment.
ETFs have provided wide exposure to palladium from an investor's perspective because it is now easier to invest in the metal directly, Swinoga said. There are ETFs for gold, silver, palladium and platinum. Palladium ETF holdings are about 800,000 ounces, he said, two to three times greater than platinum.
"This shows that the awareness is growing," he said, noting the combination of uses in autos, jewelry, dental and in the investor demand.
Swinoga thinks investment in platinum will grow as will industrial use, even though there may be some bumps along the road upwards. He said not a lot of people know about palladium but the awareness is growing.
" In Ironman2, Ironman has a palladium heart," Swinoga said. "A new color for Mercedes is palladium, and the BMW- 3 Series has palladium silver leather. "
Swinoga said Investors like the metal's appearance, they like the fact it is backed fundamentally and that it has recovered nicely with the industrial demand for cars.
"So you have the best of both worlds, where the industrial world and the precious metals world meet," he said.
By Terry Wooten; twooten@kitco.com
Daniela Cambone contributed to this report
Explaining the Dip in Platinum and Palladium - Kitco News, May 24 2010 11:57AM
http://www.kitco.com/Exclusive-News/
These are the Rules of 32
01 Timely posted information causing Effects.
02 I post a lot of timely information.
03 I post the information before it happens.
04 I leave no links but hints for you to find the truth (Infowars dot com ) and ( michaelsavage dot wnd dot com) and (drudgereport dot com).
05 I think therefore I am.
06 I am therefore I think.
07 You think I am because of my effect.
08 My Effects cause timely information.
09 My Timely Information cause timeline shifts.
10 Timeline shifts Effect the information provided.
11 The information is timely the further away from the effect it is.
12 The further away from the effect is in time the more the possibility of changes l happening.
13 A fuzzy ball of hair will always have one hair standing even after brushing it down.
14 A country's wars increase with how many countries border it.
15 A coastline increases in size as the measurements decease in size.
16 Information about coastlines can be changed as possible timelines effect the wind.
17 The wind somewhere is not blowing in all time lines.
18 The Effect of Global Warming was Global Distrust.
19 The Global Distrust is what Caused its name to change to Climate Change.
20 All the Time Lines show the Ice Increasing as the Sun Dims.
21 The Effect of the Sun CAN NOT be changed by any Effect of Man.
22 These Rules of Cause and Effect can be Broken BY GOD at anytime.
23 The effect of the Butterfly (aka The Butterfly Effect) Caused the Climate to appear to Change.
24 The Effect of the Climate Change was an Ice Age
25 Palladium has an effect on oils price.
26 Oil did not come from the dinosaurs or plankton.
27 Gold is somewhat rare but at 30 times more rare is Palladium.
28 Palladium cover-ups have had the effect of an exaggerated perceived energy shortage.
29 Cold Fusion was renamed to LENR
30 LENR (aka Cold Fusion) = Free Energy
31 The Economic Collapse is being caused by the truth of free Energy
32 The Effect of LENR (aka COLD Fusion aka Free Energy) is Total Economic Collapse
Palladium's Two-Year High Linked to Investment Demand, ETFs
14 April 2010, 8:49 p.m. EST
By John Dourekas
Of Kitco News
http://www.kitco.com/reports/KitcoNews20100412JB.html
Montreal (Kitco News) -- With palladium prices at two-year highs, many industry experts say that the rise of the metal -- primarily used in cars -- is not solely due to the auto sector recovery but also because of impressive investment demand.
ETFS Physical Palladium Shares (Ticker: PALL) have created additional investment demand and in turn are removing significant amounts of physical palladium from the supply chain, the industry officials said.
George Topping, Managing Director of Base Metals Research for Thomas Weisel Partners, said that during the past two years the demand for investment has grown and there has been a tremendous interest in palladium.
"With Exchange Traded Funds (ETFs), it makes it even easier to invest - they are a sudden and unexpected source of demand. It doesn’t give time for the industry to respond, so there is a good potential for prices to spike, " Topping said.
Palladium, currently sitting at $545 an ounce (as of press time) could possibly hit highs of $700, said Topping.
Quoting figures from Johnson Matthey, Topping said that investment demand for palladium was 260,000 ounces in 2007; 420,000 in 2008 and 635,000 ounces in 2009.
Rik Visagie, a mining analyst for Octagon Capital, said the ETFs have stepped in and taken half a million ounces of palladium off the market. “We picked palladium to outperform both platinum and gold in the intermediate term,” Visagie said.
William Biggar, the President and CEO for North American Palladium, also sees ETFs as being an important thrust behind palladium’s rise. “I think ETFs can be quite a dramatic factor going forward – it was a dramatic factor for gold," Biggar said. "We are seeing a similar trend emerging with palladium; people want access to it and they want to invest in ETFs."
In its annual report released last week, Stillwater Mining Company - the only U.S. producer of palladium and platinum- indicated that new palladium ETFs have increased retail demand for PGMs. Stillwater Mining is also the largest primary producer of platinum group metals (PGMS) outside of South Africa and Russia. The firm’s annual report highlights the fact that palladium remains a scarce commodity with very limited prospects for supply growth and one whose production problems are still present.
“South African production, key to global supply, faces impending severe operating and growth constraints,” the Stillwater report said. It also said that Russian state inventories of palladium that historically overhung the market now appear to be fully depleted.
Biggar said in terms of where palladium is positioned right now, "the fundamentals have never looked better. If you look at the supply side , palladium is a very rare precious metal – there are only about 6 million ounces produced annually. If you look at where the 6 million come from – it is nearly 50% from Russia.”
Palladium, primarily mined in Russia and South Africa, is diminishing in supply, said Visagie of Octagon Capital. “The Russian stockpiles are no longer there - palladium on the consumption side has been living off the stockpile for 20 years," he said. "Plus you have the substitution side - as platinum becomes more expensive there is a great impetus to cut down the cost and try to use palladium."
Topping , of Thomas Weisel Partners , said that the Russian supply will continue to decline. “Production in Russia fell from 3.66 million ounces to 3.56 million ounces from 2008 to 2009, " he said. In 2007 they were at 4.5 million ounces – so Russia has seen a decline in production.”
Palladium, along with platinum and rhodium, is primarily used to manufacture automobile catalytic converters, which filter out carbon monoxide and particulate emissions. Prices of all three metals prices began a steady climb last week as automakers reported improving sales and the Labor Department said 162,000 jobs were created in March.
--By John Dourekas of Kitco News, jd@kitco.com
(Daniela Cambone contributed to this report)
The Stealth Palladium Bull
By Sol Palha
Mar 23 2010 10:09AM
www.tacticalinvestor.com
The steeper the mountain the harder the climb the better the view from the finishing line
Anonymous
Palladium was the underdog of the precious metals sector for a long time, because for the most part it hardly received any attention. In the last few months this all changed and with the introduction of the Palladium ETF (PALL), Palladium has finally emerged from the shadows to the spotlight. Now the average Joe has a way to jump in and out of Palladium without having to actually purchase the metal. In reality owing the physical is far better than buying the ETF, but that is a topic for another day. When the Gold ETF was introduced it helped drive the price of gold bullion because it provided an easy means to jump in and out of Gold and so investors piled into it; from nowhere in a few years GLD has grown into a juggernaut. GLD is now the 6th largest holder of gold bullion in the world. In the same manner demand for Palladium is going to rocket upwards with the introduction of the Palladium ETF (PALL). PALL hit the markets on the 8th of January and it has already had an impact on Palladium’s price. Note that Palladium is the only precious metal that has actually put in a new 52 week highs in the face of a stronger dollar
While demand dropped a bit in 2009 due to the economic crisis, this drop did not seem to prevent this metal from surging to a series of new 52 week highs. In fact, in the past 15 months, palladium is the best performing precious metal.
China’s appetite for Palladium is growing at a voracious rate. A report by David Jollie published in May 2009 by Johnson Matthey states that demand in Chian surged from 500,000 oz to 650,000 ounces, in 2008. Demand from the Jewellery sector was rather strong in the first three quarters of the year.
In 2008 there was a surplus of 460,000 ounces but net demand still climbed by 15,000 oz, to 6.85 million oz, although the world as a whole was going through one of the worst economic crises in the last 60 years.
The palladium market was in surplus by 460,000 oz in 2008 and yet net palladium demand climbed by 15,000 oz, to 6.85-million ounces, despite the economic slowdown.
Production, on the other hand continues to fall mainly owing to lower production by the two major players in this sector, Russian and South Africa. Production fell to 7.31 million ounces in 2008, a fall of almost 15%. Investment demand for Palladium climbed to 400,000 ounces in 2008, a rise of over 50%. ETF’s were the major players purchasing 370,000 ounces and demand via coins and small bars jumped to 30,000 ounces.
As of Feb 2010, the Palladium ETF PALL has 430,000 ounces of Palladium. This is a huge amount of Palladium; to put this in perspective consider the fact that it took the London ETF over 2 years to accumulate the same amount.
As stated below the demand for precious metals (Palladium, Platinum, Gold and Silver) is increasing at a voracious pace and the story below quite clearly illustrates this point.
Investments in precious metals such as gold, silver, platinum and palladium are in feverish pitch across China. No wonder, then, that the Chinese consumption of precious metals is dramatically going up, and up. China consumed 395.6 tonnes of gold in 2008 for jewelry and investment, reports the World Gold Council, or around 14% of global demand, up from 327.8 tonnes in 2007. In 2009, gold jewelry and investment demand in China is expected to reach 432 tonnes, compared with 422 tonnes from India.
On the derivative exchanges, China's Gold Futures trading volume hit 1.49 trillion Yuan in 2008. This is likely to double in 2009. Ditto platinum and palladium. Physical Chinese demand for platinum jewelry was at around 0.76 million ounces last year, accounting for 68% of the global total of 1.12 million ounces. The latest forecast sees that hitting 1.5 million oz in 2009, which even if it is a gross rather than net (of recycling) remains impressive. The Chinese jewelry demand for palladium increased from 15.5 tonnes to 20.2 tonnes, making palladium another hot commodity in China.
China usurped India as the World’s largest consumer of Gold this year and will probably end up being the largest consumer of all the remaining 3 precious metals in the years to come.
Now let’s take a look at the Technical picture.
.................................
Palladium took a massive beating in 2008 and surrendered all its prior gains in a matter of months. However, this proved to be a buying opportunity of a lifetime, and we continuously pounded the table from late to 2008 to early 2009 and even went so far as to inform our subscribers’ that it had fallen into the screaming buy category. The term screaming buy is rarely used, and we only use it when we feel that we have spotted an investment that is extremely undervalued with incredible upside potential. From low to high Palladium surged well over 120% in a period of roughly 15 months; an incredible rate of return to say the least.
It broke through the 1st resistance point at 375 with relative ease and is now attempting to break past an even stronger zone of resistance. The $465-$475 ranges make up a zone of very strong resistance, and most likely it will take several attempts before palladium manages to break past this zone; once it does though it should be clear sailing to the 550-600 ranges.
.....................................
Palladium is now at a very important junction; it has just broken through the long term down trend line and is attempting to break out of a 10 year channel formation. Palladium will now need to trade past the 465-475 ranges for 12 days in a row. If it can achieve this, it will set up the base for a rally that could take it all the way to the 800-890 ranges. If we had to put a time frame on this, we would say that once it trades past the 456-475 ranges for the suggested period of time, it could hit these targets within 12-18 months.
The real bull market, however, will only begin when palladium trades past 1100. Taking an even long term view; a close above 1100 on a monthly basis and the ability to trade past this level for 15 consecutive days in a row, should lead to a test of the 1500-1700 ranges.
Conclusion
On our proprietary timing indicators Palladium has an open Buy signal on the daily, weekly and monthly time lines, so the long term outlook for this metal is rather bright. It is the only precious metal that went on to put in a new 52 week high in the face of a stronger dollar. More importantly it is also the only precious metal that did not issue a weekly sell signal at all during the dollar’s surge upwards; it momentarily issued a daily sell which has long since been neutralized.
The long term and the very long term outlook for Palladium is extremely bright. In the short to intermediate terms Palladium is due for some profit taking as it has mounted a tremendous rally in the past 15 months. Prudent investors would be wise to use any strong pull backs to add to or open up new positions in this metal. Investors will one day look back and view the current price as a bargain, do not make the mistake of looking out the window and wishing you had bought it. Now that you have the chance make sure you at least have a small position in it and use pullbacks to add to this position. While purchasing PALL might be one way to take a stake in Palladium, our preferred method of choice is Palladium bullion. Our bullion dealer of choice is Larry Labrode, our subscribers have dealt with him for years and his service and knowledge are simply outstanding to say the least. You can make contact with him at www.silvertrading.net
One who has imagination without learning has wings without feet.
Joseph Joubert, 1754-1824, French Moralist
Sol Palha
The weekly chart is unreal...
From that perspective, I would agree that this is still the buy time.
I'm ready to buy a Palladium bar from UBS.
Is this the right time ?
if one goes back all the way to 1977 the price differential between the two metals was never more than 550
Now ? Around 1100$
Yep! onward in 2010...
A pause on the daily but the weekly is intact... onward and upward!!!
Palladium looks unstoppable when viewing the weekly chart.
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