Russians are selliing palladium in earnest and platinum sales are imminent
mips1.net
European and Japanese palladium and platinum dealers are in for a shock after the Easter weekend.
US dealers report that the Russians have stepped up sales of palladium and rhodium and are likely to begin shipping platinum in May. Meanwhile a US car company is drastically cutting its usage of palladium and switching to more platinum and rhodium for its anti-pollution catalysts that reduce noxious fumes from exhaust pipes.
Spot palladium prices tumbled to $558 an ounce in New York Thursday from $587 early Wednesday, while platinum slid $20 to $480 an ounce. Rhodium, following a large 15 000 sale slumped to $1700 from $1900 an ounce mid week. The February peaks of the metals were palladium, $860, platinum $580 and Rhodium $2550. Illustrating concerns, Merrill Lynch downgraded Stillwater, the high flying US platinum group metal producer which reported excellent first quarter results. Stillwater is currently languishing at $29.50 compared with a February peak of $50.
Dealers report that Engelhard has been an active seller of palladium and has been selling around 20 000 ounces a day during the pre Easter week, a large amount for this metal. The betting is that the sales are on behalf of the auto company or Russia. Some are guessing that Tiger has been selling its remaining palladium holdings through Engelhard.
Meanwhile Reuters confirms from Moscow that Norilsk Nickel, Russia's platinum group metals producer, has resumed platinum and rhodium exports.
"Almazjuvelirexport (Russia's sole precious metals and gems exporting agency) has obtained the licences necessary for platinum and rhodium exports in 2000," a Norilsk spokesman told the news agency.
Yevgeny Ivanov, vice-chairman of Rosbank, part of the Interros financial-industrial group that controls Norilsk, said the company did not plan to flood the market with platinum and rhodium.
But the timing of the sales comes at a bad time since the market is jittery and Ashok Kumar of A1-Specialized Services recalls that platinum and palladium prices plunged after the Easter weekend last year, when the Russians announced that they were shipping metal again.
So far the Russian Treasury hasn't made a statement about its platinum and palladium stockpiles.
The key question is how the European and Tokyo markets will react when they open on Tuesday. The majority of London dealers have been bullish on palladium, describing it as "firm". New York and other US players, however, have not been optimistic for months. They have detected stiffening resistance on the part of auto companies and other consumers. They have also been wary of a palladium ramp involving Russia and some dealers. |
