North American Palladium(AMEX:PAL)- PGM Producer Message Board

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Gold/Mining/Energy : North American Palladium(AMEX:PAL)- PGM Producer

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To: Elizabeth Andrews who wrote (931)	8/10/2001 9:53:12 PM
From: Sleeper	Read Replies (1) of 976

Gold ramp unsustainable By: Byron Kennedy Posted: 08/10/2001 09:00:00 PM \| © Miningweb 1997-2001 ...Platinum UBS Warburg is currently reviewing its metal forecasts but one can expect a fairly substantial downgrade in its call on platinum for the second half of the year. Guesstimates for 2002 "are barely changed on the basis that we do see this as being a one-off speculative event." Reade is referring to platinum's massive swing from $620/oz to $430/oz in two months. "Once the speculative selling that we've seen primarily out of Tocom is out of the way…I see no reason why the platinum price should not drift back up towards $500. What will stop it from exploding higher like it did in April, is the fact that we haven't seen the market go into sharp backquidation." "Any significant tightening in the forward market has been completely absent on this move down in platinum, which is why I say it will head back gently towards $500 at five or ten dollars a day. That rather than lurching at thirty, forty or fifty dollars a day back up to $600 like it did in April." "I have a long-term valuation price of platinum at $360, which I have had for a long time and am quite comfortable with." Palladium Palladium "looks in trouble," according to Reade, and says the 20% year-on-year decline in electronics demand factored into his valuation models could be " too optimistic." "Looking at the number of components being sold, and the substitution away from palladium towards nickel, we could be in for a contraction of 50% this year. In terms of usage of palladium in auto catalysts this year, it should still be pretty high but I'm not sure how much destocking is going on by the car companies." "They [car companies] have been believed to have built up major stocks through the late 1990s…I just wonder in light of these declining prices if at least part of this hasn't been triggered by running stocks down. They are selling less cars than they sold last year. They are producing even less cars than they are selling because they are destocking unsold cars and they are probably destocking unused palladium as well. That could have a major impact upon palladium demand this year." To add to palladium's woes, Reade says longer-term "there's plenty of production expansions coming through as by-products of South African production. And a lot of the expansions are coming from higher palladium ration ore bodies in South Africa Sleeper

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