Commodities Report
PALLADIUM exports from Russia, the world’s top producer, are
unlikely to fall significantly in the next three years even as the
country’s cars consume more of the metal in catalytic converters,
industry analysts said.
But exports may decline slightly in the long term as Russia
introduces laws to cut vehicle emissions, creating a larger
domestic market for world leader Norilsk Nickel.
“There will be more internal consumption,” said Mikhail Piskulov,
Moscow office GM for British platinum group metals specialist
Johnson Matthey.
“It won’t make a dramatic difference at this stage,” he said, “but
when more stringent regulation comes into force in Russia, there
will be more demand.”
The resumption of Russian exports in the face of weak demand
decimated palladium prices in a little more than two years after
January 2001, when consumers built stockpiles that pushed the price
above $1000/oz on supply concerns. Investment fund appetite for
commodities has returned palladium to two-year highs above $320
last week.
Norilsk Nickel has said it intended to produce between 2,90-million
and 2,95-million ounces of palladium this year, from 3,133-million
last year.
The automotive sector accounted for more than half of global
palladium demand, Société Générale said in a recent research
report. Jewellery makes up 21%, electronics 15% and dental
applications 10%.
North America uses more palladium than any other region.
Reuters
http://www.businessday.co.za/articles/markets.aspx?ID=BD4A17…