Palladium Panic-Bid To Record Highs As Shortage Fears Mount

Palladium was up 55% in 2017 - the best performing commodity in the world - and if the first two days of this year are anything to go by, 2018 will see a repeat.

Palladium inventories in warehouses tracked by Nymex shrank 25 percent in December, capping a fourth straight annual decline, the longest streak since 2000.



Amid shrinking inventories and still strong (credit-fueled) auto production (and sales), Bloomberg reports the metal used to curb pollution from gasoline-fueled engines climbed to a record on the New York Mercantile Exchange as the dollar weakened for a fifth straight day.




Palladium production will continue to lag behind consumption until at least 2022, Morgan Stanley analysts forecast in a report Dec. 11.

“People are worried about shortages,” Peter Thomas, a senior vice president at Zaner Group LLC in Chicago, said by telephone.

“The market took off on short supply, good demand and a weak dollar, and ran into some monstrous amounts of stops and popped and rallied.”

Good thing there is no inflation.


stacking12321 Clint Liquor Wed, 01/03/2018 - 12:24 Permalink

i did good buying palladium a couple years ago at $550

a few months ago i got out at $900 and bought platinum instead, because the pt/pd ratio was historically very low and i expected it to reverse - normally 1oz pt will buy 2.5 oz pd:

but platinum stayed put and palladium has continued its run upwards.

In reply to by Clint Liquor

Pinto Currency HopefulCynical Wed, 01/03/2018 - 15:34 Permalink

Don't worry, the silver panic is coming - palladium is exposing the nature of the fraudulent market in London where the price of the precious metals is primarily determined by trading metal debt instruments not metal itself.

In reply to by HopefulCynical

RedDwarf tmosley Wed, 01/03/2018 - 12:24 Permalink

This is one of the reasons I am switching to cryptos.  Eventually we will have cheap solar and even fusion power and amazing mining technology.  Deep mining, asteroid mining, etc.  Technology is going to get to the point that availability of raw materials is going to increase greatly.

Just because gold et al are scarce elements on a cosmological scale does not mean we will not have access to more than the demand, ie they might not be scarce in our context.  Scarcity with these raw materials is not guaranteed.  It can be guaranteed with cryptos.

For some reason the idea that as humanity becomes masters of physical reality that raw materials will become less scarce is deemed silly or triggers a lot of people on ZH.  They are emotionally invested in things like gold, to the point it is akin to a religion.

In reply to by tmosley

DEMIZEN Wed, 01/03/2018 - 11:33 Permalink

tough bets when everything is oversold. we have these speculative money rushes  at any elevated volatility or media buzz. today is palladium tomorrow god knows what. Pd demand or fundamentals have not changed in last 3 weeks. sad and insane.


whats next beryllium?

HenryHall Wed, 01/03/2018 - 11:50 Permalink

Industrially, Platinum and Palladium are substantially able to be substituted, one for the other. Palladium has historically been less expensive than Platinum (not today however) so it tends to have been preferentially used, for example in automobile catalytic converters.

However, the BRICS countries between them have more than 97% of all PGM resources in the ground. (PGM is Palladium and Platinum combined, almost all ore is in South Africa and Russia) This might just have been a big part of why South Africa was admitted to the BRIC in the first place.…

As a consequence, I can foresee Palladium backed Rands and Rubles rather than gold backed. It just needs the price to be a bit higher (already >80%) and the time just right. Then, suppose you want to buy Rand so you can buy Rubles or Yuan to buy oil? No problem as long as you can pay in precious metal of any kind.

Only India is screwing up BRICS right now and if they are not careful BRICS will become Brasil, Russia, Iran, China, South Africa. India needs to make a pipeline deal with China soonest or India is a candidate to become the next Libya.

kavabanga Wed, 01/03/2018 - 11:53 Permalink

palladium (XPD) price is a "pip" away from all time High

I am looking for a long term sell, which means that I will try to hold the trade until the end of 2018. 
However, if we get to 700 I will close the trade with some mad profits. 

Dollar is expected to get stronger until the end of 2018, so lets see how we do. 

Barney08 Wed, 01/03/2018 - 11:53 Permalink

If you are to believe in the auto slow down due the multiple rate hikes (mentioned many, many time by the good folks right here at ZH) and couple that with a subscription to the theory of going the other way than the masses some long dated Puts into Q4 might pay off? But then again you might you A$$ handed to you. Last time I bot Put was when the S&P was at 2550 and I thought it looked ripe for a 10%er.

We all know how that ended. 


Ink Pusher Wed, 01/03/2018 - 11:57 Permalink

This is just the beginning of Precious Metals returning to the forefront ... based upon the fact that they are realistically valued commodities in their physical form.

Shove that up your blockchain alimentary canal and twist on it.

Michigander Ink Pusher Wed, 01/03/2018 - 14:10 Permalink

 ... based upon the fact that they are realistically valued commodities in their physical form.

Facts are what you make of them. Your "facts" are not my "facts. The fact is, something has changed and you're either too stupid to see it, or too ignorant to admit it.

The fact is, your bullion demand is flowing into bitcoin and alt coins so stick that up your alimentary canal.

Fact: Institutional money is realizing that BTC is a non correlated asset class and they can use it, full strength, to hedge their stock and bond portfolios. The herd hasn't even started to congregate yet on this one.

Fact: Now that there are cash settled futures instruments, 2018 will bring in the crypto ETF's for all the lazy ignorant masses (am I touching a nerve here??) that can't figure out how to buy an actual bitcoin.

My BTC has paid off my mortgage, and my sons mortgage. What has your bullion done for you?

In reply to by Ink Pusher