Palladium Rises to 13-Year High on Russia Supply Concerns

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Release: 2014-08-29 15:27

Palladium futures jumped to the highest since 2001 as supply concerns mounted amid prospects for further sanctions against Russia, the world’s biggest producer.

The U.S. and Europe accuse Russia of escalating the five-month conflict in Ukraine by sending troops over the border to support rebels. An ounce of palladium, which is used mainly in pollution-control devices in cars, bought as much as 0.6323 ounce of platinum in London, the most since August 2002, data compiled by Bloomberg show.

Demand for palladium this year will exceed mine output by the most ever, according to London-based Johnson Matthey Plc, which makes a third of the world’s catalytic converters. A five-month labor strike crimped output in South Africa, the second-biggest source of the metal, helping boost prices 25 percent this year through yesterday.

“There is a lot of concern about palladium as imposition of more sanctions against Russia may affect supplies, which is already in a precarious state because of the strike,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “Palladium will continue to remain supported.”

Palladium futures for December delivery rose as much as 1.38 percent to $910.50 an ounce at 12:50 p.m. on the New York Mercantile Exchange, the highest for a most-active contract since February 2001.

Prices are heading for the seventh straight monthly gain, the longest run of advances since January 2011. Holdings in exchange-traded funds backed by palladium rose to an all-time high of 95.93 metric tons this month.

Source: Bloomberg

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