Palladium-still most hated metal... ____________________ For the first time the market is now able to get a clearer handle on the production of the world’s biggest palladium producer. Norilsk, the Russian company which is estimated to account for 50% of total world palladium output, finally revealed details of its pgms output, following a decree promulgated by President Putin at the beginning of this year which declassified information concerning Russia’s pgms and diamonds. Norilsk also said it would in future release quarterly production statistics for pgms as well as nickel and copper.
Norilsk kept observers hanging on, however, for what might be even more interesting information, concerning precise details as to the amount of palladium stocks it is sitting on. It said it ‘expected’ to disclose full data concerning its pgms reserves by the end of the year; which is not necessarily the same as castiron commitment to reveal all. There is quite widespread belief in the market that Norilsk’s inventories are substantial. West European new car sales in August rose by 7.5% year-on- year, according to figures from the European Automobile Manufacturers Association. However new sales are still down by 0.5% for the first 8 months of 2005 compared with the same period in 2004.
Canada launched its first palladium coin, the $50 face value Maple Leaf. It was unveiled alongside a new $50 face value gold coin and a silver $1 piece. Outlook Palladium was given a boost in September by the resurgence in speculative interest in precious metals, but lease rates at near zero suggest a continuing belief that global stocks remain more than comfortable. The London pm fix drifted lower until mid-month (12th-14th) saw the trough, at $182.50/oz, before moving up to the peak of $210/oz on the 20th. Final pm fix of the month was $194/oz. What is remarkable about palladium at the moment is the intense devotion it inspires among the investment community on Nymex, which in the week ending 20th September saw a substantial return to the net longs by a huge 228,900 oz. There are no fundamental reasons why palladium should be higher than $180/oz right now, though expect some greater volatility as we move closer to Norilsk showing the world what it has. Short term: $180/oz-$195/oz.
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