Palladium Extends Rally Above US$1,360/oz Amid Improving Risk Sentiment

[SMM Express] UBS has identified improving medium-term prospects for platinum group metals (PGMs), citing constrained primary supply, ongoing industry restructuring and stronger-than-expected demand from hybrid vehicles. Although PGM prices have softened in recent months amid weaker investor sentiment and demand concerns, the bank expects supply-side constraints to provide underlying support to the market. The investment bank noted that hybrid vehicle adoption could sustain autocatalyst demand for platinum, palladium and rhodium for longer than many market participants currently anticipate. While PGM prices are expected to remain range-bound in the near term, improving market fundamentals could support a gradual recovery. Against this backdrop, UBS named Valterra as its preferred PGM mining investment, highlighting the company's strong balance sheet, high-quality asset portfolio and leverage to a potential recovery in metal prices. The bank believes producers with resilient operations and financial strength are best positioned to benefit as supply tightens and market conditions improve.

[SMM Flash] Belgium-based materials technology and recycling company Umicore reported a strong first-half performance for 2026, with adjusted earnings per share rising by more than 14% year-on-year. The company attributed much of this growth to its Recycling Business Group, which recorded a 36% increase in adjusted EBITDA on revenue growth of 8%. Umicore’s recycling operations, which recover precious and specialty metals from end-of-life electronics, jewellery and industrial materials, benefited from high processing activity, robust demand for recycled metals and a favourable precious metals price environment. The division continued to leverage its closed-loop business model, enhancing operational efficiency while supporting sustainable metal supply chains. The Recycling Business Group accounted for nearly three-quarters of Umicore’s total sales during the first half of 2026, underlining the strategic importance of recycled metal feedstock to the company’s earnings profile. The results highlight the growing role of secondary supply in the precious metals market, particularly for platinum group metals, gold and silver, as industrial consumers increasingly seek secure and sustainable sources of raw materials.

This week, precious metals first declined then rose. ADP employment data significantly missed expectations, causing rate hike expectations to pull back rapidly, and silver prices rebounded strongly to hit a new high in nearly two months. In the short term, focus on the revision of rate hike expectations by the non-farm payrolls data. In the medium and long term, US debt risks and the turning of the interest rate cycle will continue to support precious metals.