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General Market Commentary
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General Market Commentary
Palladium nears record $1900 on South Africa power cuts
LONDON – Palladium neared a record $1900/oz and platinum gained after South African mining companies halted operations in response to the country’s power cuts.
South Africa, the world’s biggest producer of platinum and No. 2 palladium supplier, is facing a sixth day of rolling blackouts. State utility Eskom Holdings is struggling with breakdowns at plants and heavy rains that have soaked coal used as fuel.
“Tight supply that potentially could get even tighter due to production problems in South Africa helps provide the underlying support,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Palladium may “pause at $1900 given some technical resistance, but overall the price could go higher,” he said.
Spot platinum added 0.7% to $901.98/oz. Palladium rose 0.6% to $1893.85. Prices have climbed for 13 straight days, the longest stretch since 2014.
Palladium has smashed through new record highs over the past two years because of limited supply and higher demand for the metal, which is used in autocatalysts. The auto industry has boosted purchases to meet stricter emissions rules, sending prices up 50% this year.
Carmakers are not that price sensitive given how little palladium contributes to their total costs, said Hansen.