Russia and Ukraine tense short-term palladium supply pre-strong platinum value greatly increased? [SMM Quick Review]

SMM2 March 24: Russia and Ukraine situation "sword to each other" exacerbated financial market panic, while deriving the risk of the supply of non-ferrous commodities. COMEX silver and gold rose all the way, up 3.9% and 3.02% respectively as of 18:30. Where will Russia, as a major exporter of platinum and palladium, lead the price of platinum and palladium?

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Spot market

The average spot price of palladium is 571 yuan / g today, up 4.58% from yesterday. As can be seen from the chart below, the average spot price of palladium has shown a fluctuating upward trend since 2022.

"check the spot historical prices of SMM precious metals products

As we all know, Norilsk Nickel is the world's largest producer of nickel and palladium and one of the top ten copper producers in the world. Nearly 50% of the world's palladium production and about 13% of platinum production.

According to SMM analysis, due to the sudden war between Russia and Ukraine, the possible production reduction or shutdown of Noni will have a great impact on the global platinum and palladium supply, especially the palladium supply. In addition, the current epidemic in South Africa, another major palladium supplier in the world, has led to the largest low operating rate of palladium mines, and the market is expected to be very short of palladium supply in the short term.

SMM believes that due to the great uncertainty of the impact of the war on the follow-up, palladium prices fluctuated slightly under stable supply and demand in the early stage, so the impact of the war on palladium prices is only a boost caused by emotion, and the sustainability of the monthly rise is still uncertain, but it does not rule out attacking the high of 700yuan / g again driven by speculative funds. In addition, as the current market stock of platinum is large, the fundamentals of short-term supply exceeding demand will not change, so the impact of the Russia-Ukraine incident on platinum prices is expected to be small, and it is only possible that there will be a certain rise driven by the rise of precious metals such as gold, and it is unlikely that the price will be as high as 270 yuan / g before breaking through.

Shenyin Wanguo Futures: changes in Russia and Ukraine may cause concerns about commodities and energy supply, benefit nickel, aluminum, platinum, palladium and other metals, prefer nickel with strong demand support, and attach importance to Huayou Cobalt (nickel resource leader, positive material integration leader). It is recommended to pay attention to Yunshan Aluminum shares, Chinalco, Shenhuo shares, Yunhai Metals, Hesheng Silicon Industry, Precious Research Platinum Industry (palladium, platinum plate scarcity target).

"the situation in Russia and Ukraine has changed in favor of nickel, aluminum, palladium, platinum, etc. [institutional review]