Palladium on Friday surged the most intraday since 2008 as scant supply and robust demand extended a record-breaking rally.
Spot palladium jumped as much as 9.7 percent to an all-time high of US$2,539.14 per ounce.
The metal rallied to post its best week since 2001 and has shown little sign of slowing down, even as some analysts caution that prices might be due for a pullback.
Prices were up 8 percent as of 5pm in New York, while futures settled 2.2 percent higher at US$2,224.90.
While palladium’s rally has been driven by supply deficits and surging demand, the increases have exceeded market forecasts, said Noah Capital Markets Ltd analyst Rene Hochreiter, who expects spot prices could retreat to an average of US$2,250 per ounce for the rest of the year.
“Prices do not go up forever and the recent run should see a correction, though the fundamental shortfalls will not go away anytime soon,” Hochreiter said.
Palladium is trading at more than twice the price of platinum, which might motivate automakers to use it as a substitute, Australia & New Zealand Banking Group Ltd (ANZ) said.
“A modest recovery in the auto sector, along with tighter emissions regulations, should lend support,” ANZ strategists Daniel Hynes and Soni Kumari said in a report.
Still, a “price setback is possible for palladium following its impressive rally this year,” they added.
Palladium’s surge has been a boon for platinum group miners in South Africa, which accounts for about 38 percent of global palladium supply.
The FTSE/JSE Africa Platinum Mining Index is at the highest since 2011 and the shares of top producer Sibanye Gold Ltd have risen nearly fourfold in the past 12 months.
“Further weakness in mining production can’t be ruled out,” ING Bank commodities strategists Warren Patterson and Yao Wenyu said in a note to clients. “While higher prices should be encouraging miners to look to boost output, palladium is largely produced as a by-product, making supply more inelastic.”
Supply constraints in South Africa, where producers are grappling with an uncertain electricity system, have been one of the main drivers for the price rally, ABN Amro Bank NV strategist Georgette Boele said.
“It’s a very structurally tight market,” TD Securities analyst Ryan McKay said by telephone from Toronto. “Even the actual physical demand — automakers who use this stuff providing a bid for that metal — that drives the prices up when it’s super tight and supply is not really there.”
In other commodities trading, gold rose US$9.80 to US$1,558.80 per ounce and silver rose US$0.13 to US$18.01 per ounce, while copper was unchanged at US$2.85 per pound.
Additional reporting by AP
TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration. “Any product going
STRUGGLING BUSINESS: South Korea’s biggest company and semiconductor manufacturer’s buyback fuels concerns that it could be missing out on the AI boom Samsung Electronics Co plans to buy back about 10 trillion won (US$7.2 billion) of its own stock over the next year, putting in motion one of the larger shareholder return programs in its history. South Korea’s biggest company would repurchase the stock in stages over the coming 12 months, it said in a regulatory filing on Friday. As a first step, it would buy back about 3 trillion won of paper starting today up until February next year, all of which it would cancel. The board would deliberate on how best to effect the remaining 7 trillion won of buybacks. The move
China’s Huawei Technologies Co (華為) plans to start mass-producing its most advanced artificial intelligence (AI) chip in the first quarter of next year, even as it struggles to make enough chips due to US restrictions, two people familiar with the matter said. The telecoms conglomerate has sent samples of the Ascend 910C — its newest chip, meant to rival those made by US chipmaker Nvidia Corp — to some technology firms and started taking orders, the sources told Reuters. The 910C is being made by top Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯) on its N+2 process, but a lack
NVIDIA PLATFORM: Hon Hai’s Mexican facility is to begin production early next year and a Taiwan site is to enter production next month, Nvidia wrote on its blog Hon Hai Precision Industry Co (鴻海精密), the world’s biggest electronics manufacturer, yesterday said it is expanding production capacity of artificial intelligence (AI) servers based on Nvidia Corp’s Blackwell chips in Taiwan, the US and Mexico to cope with rising demand. Hon Hai’s new AI-enabled factories are to use Nvidia’s Omnivores platform to create 3D digital twins to plan and simulate automated production lines at a factory in Hsinchu, the company said in a statement. Nvidia’s Omnivores platform is for developing industrial AI simulation applications and helps bring facilities online faster. Hon Hai’s Mexican facility is to begin production early next year and the
RSS