Tuesday February 8, 6:23 am Eastern Time
FOCUS-Palladium rallies to hit all-time high
By Martin Hayes
LONDON, Feb 8 (Reuters) - The price of palladium continued to climb sharply on
Tuesday, with strong buying driving prices to an all-time fixing high of $566.00 an ounce as
industrial demand found supplies scarce, traders said.
On Monday afternoon, palladium had been fixed at $540.00 an ounce, itself a record high. Since the start of the year, prices of
have risen over $120 or nearly 28 percent.
``You have to look to Moscow, really. It is like a stuck record at the moment -- they are not supplying enough,' one trader
said.
The Russians supply around 70 percent of the world's annual palladium needs and 20 percent of its platinum, but internal
bureaucracy has delayed shipments to the west where demand from the automobile industry for catalysts continues to boom.
There is still uncertainty over when Russia's acting President Vladimir Putin will sign long-awaited export quotas, particularly as
the political scenario in Russia is dominated by the presidential election slated for March.
``They are not selling palladium at previous rates, but the demand is still there at previous rates,' the trader noted.
Buying was evident at the London morning fix, the first of two daily sessions that establish benchmark prices. European gains
were spurred by strength in Asian markets.
TOCOM palladium futures surged by their daily limit, tracking sharp gains in New York overnight and the yen's decline against
the dollar.
Platinum, meanwhile, was fixed at $513.00 an ounce, which was below the $522.00 fixing of Monday afternoon as the two
main PGM (platinum group metals) diverged. The platinum market is not so dependent on Russian metal.
``Russia is an important supplier, yes, but it is not the dominant supplier,' the trader added.
PALLADIUM EYES $600
The relentless bull run in palladium is likely to continue as no substitutes for the platinum group metals (PGMs) have been found
for making autocatalysts. The next price target is $600.00 an ounce, analysts said.
Palladium deliveries from Russia have been held up in the first half of every year since 1997. With strong industry demand,
concerns about Russian supply pushed palladium up from $120 an ounce in early 1997.
``At some stage the bubble will burst, but only when there is more than a trickle of metal,' the trader said. |
