UBS Sees Medium-Term Support for PGMs, Highlights Valterra as Preferred Producer

[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.

[SMM Express] Palladium prices continued their upward momentum this week, rising above US$1,360/oz and reaching their highest level in nearly two months. The gains were supported by broad strength across the precious metals complex as markets responded positively to progress in diplomatic efforts aimed at easing tensions between the United States and Iran. Expectations of lower energy prices and a weaker US dollar also improved investor sentiment, increasing the appeal of dollar-denominated metals. Market participants are closely monitoring upcoming US labour market data for further indications of the Federal Reserve's policy direction. Softer expectations for interest rate tightening have provided additional support to precious metals. Meanwhile, major producer Nornickel maintains its expectation of a global palladium market surplus in 2026, reflecting structural changes in automotive demand.

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.