Palladium analysts' forecasts & commentary for 2012

Palladium analysts' forecasts & commentary for 2012

palladium

	high	low	average	range
Average forecasts -	$879	$549	$736	$330
William Adams - Fastmarkets	$900	$500	$780	$400
Daniel Brebner - Deutsche Bank	$780	$580	$698	$200
Suki Cooper - Barclays Capital	$950	$575	$795	$375
Bayram Dincer - LGT Capital Management	$950	$500	$800	$450
Peter Fertig - QCR Quantitative Commodity Research Ltd	$975	$525	$760	$450
Carl Firman - VM Group	$885	$520	$682	$365
René Hochreiter - Allan Hochreiter (Pty) Ltd	$900	$650	$775	$250
Michael Jansen - JPMorgan Securities	$925	$545	$850	$380
David Jollie - Mitsui & Co Precious Metals Inc	$860	$565	$745	$295
Tom Kendall - Credit Suisse Securities (Europe) Ltd	$860	$560	$755	$300
Philip Klapwijk - Thomson Reuters GFMS	$860	$590	$735	$270
Eddie Nagao - Sumitomo Corporation	$875	$600	$750	$275
Ross Norman - Sharps Pixley Ltd	$1,050	$650	$846	$400
Frederic Panizzutti - MKS Finance S.A.	$750	$570	$663	$180
Thorsten Proettel - LBBW	$800	$500	$720	$300
Rohit Savant - CPM Group	$800	$450	$613	$350
Daniel Smith - Standard Chartered	$895	$575	$701	$320
James Steel - HSBC	$900	$600	$785	$300
Glyn Stevens - INTL Commodities Inc	$920	$565	$765	$355
Anne-Laure Tremblay - BNP Paribas	$950	$530	$725	$420
Edel Tully - UBS	$875	$540	$725	$335
Matthew Turner - Mitsubishi Corporation International (Europe) Plc	$920	$505	$710	$415
Michael Widmer - BAML	$800	$500	$675	$300
Wolfgang Wrzesniok-Rossbach - Degussa Goldhandel GmbH	$725	$485	$600	$240

Forget gold this year it's all about palladium

http://www.graziadaily.co.uk/fashion/archive/2012/08/01/forget-gold-this-years-all-about-palladium-thanks-to-a-london-fashion-week-jewel.htm

LONDON—The palladium market is revving up.

After lagging behind other precious metals for much of the year, prices for the white metal—a key element in cars' catalytic converters—are pulling ahead. Since the beginning of the month, palladium has risen almost 2%, hitting a one-month high on Friday.
That's a reversal from the first quarter, when palladium fell 0.3%.
Now, investors are anticipating a squeeze—and higher prices—amid predictions that demand will outstrip supplies in 2012 following a hefty surplus last year. Consumption is expected to rise because of a strong recovery in car sales in the U.S. and China. Meanwhile, Russia has signaled it will scale back sales of palladium from its strategic stockpiles, which accounted for 9% of global supplies last year, according to estimates.
Those factors already are luring speculators back to the market, further curtailing the metal's availability to industrial users.

"It is the most attractive story" among both precious and base metals, a category that includes copper and nickel, said Nikos Kavalis, a commodity strategist with the Royal Bank of Scotland. While copper also tends to rise when manufacturing activity picks up, its price is weighed down by big inventories in China.
Palladium futures on Tuesday closed down 0.5%, to $665.15 an ounce. RBS forecasts a surge in palladium prices to an average of $900 an ounce in the fourth quarter and $1,000 in 2013.
Global demand for palladium will increase 4% both this year and next, averaging 9.51 million ounces in 2013, according to estimates by BNP Paribas.
U.S. passenger-car sales surged to 1.4 million vehicles in March, a 13% increase over the year-earlier period. In China, they rose by 4.5% to 1.4 million. Catalytic converters are used in cars to help reduce harmful emissions.
China is expected to tighten vehicle-emission standards later this year. That move likely will force car manufacturers there to increase the amount of palladium in catalytic converters, boosting the country's need for imports, according to Barclays.

Some investors prefer palladium over platinum, a "sister" metal that is also widely used in cars. Palladium is mostly used in gasoline exhausts, which are more common in the U.S. and China. Platinum, on the other hand, is for diesel-fueled cars like those driven around Europe. Demand for new vehicles in Europe remains anemic as the Continent struggles to fend off an economic slowdown.
That's mainly why Koen Straetmans, a strategist who manages commodity allocations for ING Investment Management, in late March boosted palladium exposure across the firm's 20-billion-euro multi-asset portfolio.
"The fortunes of the respective regional car markets favor palladium," Mr. Straetmans said.
Demand is recovering at an inopportune time. Russia, which accumulated palladium during the Soviet era, historically has dipped into strategic stockpiles when world demand has been strong, and its presence as a standby supplier has kept a lid on prices in the past.
But Russian officials and metals traders say those stockpiles—the exact amount is a state secret—are dwindling. Russian officials have repeatedly hinted in past months that stockpile sales are set to be slashed. BNP Paribas predicts that Russia will sell 400,000 ounces of palladium this year, 50% less than last year.
"Palladium has potentially the weakest supply outlook in 2012 of any commodity we forecast," analysts at Barclays wrote last week. They predicted palladium demand will exceed supply by 215,000 ounces this year, compared with a surplus of more than 1 million ounces in 2011.
Some analysts, though, say there are technical factors in the market that could impede palladium's rise. Even with prices up this month, futures are below the market's 55-day moving average of $681.21 and 200-day moving average of $679.51. Moving averages indicate a commodity's medium-term trend and can act as a cap on prices.
But investors largely are betting prices won't lose steam.
In the first quarter, they added $186 million worth of palladium through exchange-traded products, which are mostly backed by the physical metal, according to ETF Securities. That was the strongest quarter in terms of net inflows since the fourth quarter of 2010.



http://online.wsj.com/article/SB10001424052702303978104577364041017374120.html?mod=googlenews_wsj

Palladium Supply Worldwide To Remain In Deficit This Year: Survey

May 4, 2012 2:23 PM EDT

The global supply of palladium is expected to remain in deficit this year, as it was last year, Thomson Reuters GFMS said.

The consultancy, in its annual Platinum & Palladium Survey 2012, said this week that in 2011 palladium's gross deficit almost halved to 313,000 ounces.

"This owed much to a relatively subdued 2 percent rise in global fabrication, which nonetheless reached an 11-year high," the consultancy said in a statement.

This featured a solid 5 percent lift for palladium autocatalyst demand -- also an 11-year peak -- driven by firmer demand in gasoline applications and substitution-related gains at the expense of platinum.

However, the survey also showed that these gains were partially offset by weaker offtake in most other areas of palladium fabrication demand, with the heaviest losses having emerged in jewelery, principally in China, which declined to an eight-year low. 

 

As a result, this relatively modest increase in global palladium fabrication was comfortably outstripped by a 5 percent rise in supply, which climbed to a record.

"In addition to a lift of more than 3 percent in mine production, this was a function of robust gains in autocatalyst recycling which continued to benefit from the historical escalation in palladium autocatalyst demand during the late 1990s/early 2000s," the consultancy said.

Despite a smaller gross deficit, substantial liquidations from exchange-traded fund (ETF) holdings and a reduction in investors' long positions on futures markets, palladium prices still posted a record high annual average in 2011 of $734.

This followed a dramatic rise in prices during late 2010 and early 2011. And even though ast year saw palladium prices fall by 20 percent on an intra-year basis, the decline was limited to the last four months, and driven very much by profit taking, Thomson Reuters GFMS said.

"Palladium prices are also likely to benefit from the favourable investor climate towards precious metals, while the downside may be limited as palladium's demand base in autocatalyst is less exposed to Europe and is quite broadly based geographically," Philip Klapwijk, Global Head of Metals Analystics at Thomson Reuters GFMS, said in a statement.

"Overall, therefore, palladium is forecast to trade in a range of $575 to $775 through to end-2012."

The most actively traded palladium contract on the Comex closed down $8.10 to $661.35. 

 

http://www.ibtimes.com/articles/337443/20120504/palladium.htm

 

Autos Boosting Palladium Demand

By Frank Holmes|Oct 15, 2010, 6:14 PM

We talked earlier this week about the long-term prospects for copper prices but palladium has been the star performer of metals this year. As of yesterday, palladium is up 47 percent in 2010 to $602.75 an ounce.
Palladium has benefited from a rebound in global auto production, which is expected to jump 20 percent from 2009 levels this year. Palladium is used in catalytic converters for automobiles. The average catalyst contains 4 grams of palladium or platinum. With China building between 15-20 million new automobiles a year, much more of the metals will be needed.

Auto production in China has receded in recent months from its peak earlier this year but remains three times higher than it was just a few years ago. In addition, Macquarie says there is a regulatory bias in China toward regular gasoline vehicles over diesel. Gasoline engines use more palladium for catalyts while diesel engines rely more on platinum. We’ve also seen a rebound in the U.S. auto market. Production has bounced off of 2009 lows and a report from Experian this week shows new-car registrations rose for the third-consecutive quarter in June. Car registrations were up 13.5 percent from the same period last year.
Like copper, palladium has solid supply/demand fundamentals. Total demand is expected to increase 43 percent from 2009-2015, nearly all of that coming from the automobile industry. Meanwhile, mine supply is only expected to rise by 2 percent over the same time period.

If demand for automobiles continues to rise in China, the U.S. and other emerging markets such as Brazil, Russia and India, it’s possible we could see a large deficit in supply during the next couple of years.

PALLADIUM

Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. Palladium is a rare and lustrous silvery-white metal that was discovered in 1803 by William Hyde Wollaston, who named it after the asteroid Pallas, which in turn, was named after the epithet of the Greek goddess Athena, acquired by her when she slew Pallas.
Palladium, along with platinum, rhodium, ruthenium, iridium and osmium form a group of elements referred to as the platinum group metals (PGMs). Platinum group metals share similar chemical properties, but palladium has the lowest melting point and is the least dense of these precious metals.
The unique properties of palladium and other platinum group metals account for their widespread use. One in four goods manufactured today either contain platinum group metals or had platinum group metals play a key role during their manufacturing process.^[2] Over half of the supply of palladium and its congener platinum goes into catalytic converters, which convert up to 90% of harmful gases from auto exhaust (hydrocarbons, carbon monoxide and nitrogen oxide) into less harmful substances (nitrogen, carbon dioxide and water vapor). Palladium is found in many electronics including computers, mobile phones, multi-layer ceramic capacitors, component plating, low voltage electrical contacts, and SED/OLED/LCD televisions. Palladium is also used in dentistry, medicine, hydrogen purification, chemical applications, and groundwater treatment. Palladium plays a key role in the technology used for fuel cells, which combines hydrogen and oxygen to produce electricity, heat and water.
Ore deposits of palladium and other platinum group metals are rare, and the most extensive deposits have been found in the norite belt of the Bushveld Igneous Complex in the Transvaal in South Africa, the Stillwater Complex in Montana, United States, the Sudbury District of Ontario, Canada, and the Norilsk Complex in Russia. In addition to mining, recycling is also a source of palladium, mostly from scrapped catalytic converters. The numerous applications and limited supply sources of palladium result in palladium drawing considerable investment interest.