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General Precious Metals
Palladium deficit to widen, Nornickel says as net profit jumps 81%
The global palladium market will remain in structural deficit this year, Russia’s Norilsk Nickel (Nornickel) said on Tuesday as it reported an 81% leap in first-half net profit.
Nornickel, the world’s largest palladium producer, said that first-half net profit jumped to $3 billion as London palladium prices rose by 40%. Palladium prices hit a three-week high in London on Tuesday.
Higher prices for palladium and increased output offset a decline in prices for nickel, copper and platinum amid concerns over U.S.-China trade negotiations and a slowdown in the global economy, Nornickel President and co-owner Vladimir Potanin said in a statement.
The company expects a global palladium deficit of 600,000 troy ounces for 2019 because of growing demand from the autos sector on the back of tighter emission regulations in all major markets. Palladium is used mainly in emissions-capping catalytic converters for automobiles.
Nornickel, vying with Brazil’s Vale to be the world’s biggest nickel producer, said it expects the global nickel deficit to narrow to 60,000 tonnes in 2019, with Indonesia and China increasing their nickel pig iron (NPI) output.
Shares in Nornickel rose by 2.3% in Moscow, outperforming a 0.9% gain for the broader index on its financial results and stronger than expected dividends thanks to higher revenue and lower costs, BCS Global Markets analysts said in a note.