[concern] Palladium hit a record high and domestic prices are expected to rise

SMM4 March 25: recent palladium prices rising sentiment is high, 23 international spot prices reached 2929 U.S. dollars per ounce, a record high. International palladium spot has risen more than 30 per cent since its January low so far this year. In the domestic market, the spot price of palladium has also reached about 670 yuan / g, the highest since February 2020. In the future, under the background of tight supply and demand abroad, domestic palladium prices are likely to rise.

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SMM believes that the recent sharp rise in foreign prices is due to the recovery of foreign car production, and the market is worried that the rebound in demand for near car manufacturing will aggravate the shortage of palladium. Palladium is used in automobile exhaust treatment devices, and more and more stringent environmental regulations in various countries force automobile manufacturers to use more palladium in production.

At the same time, the problem of palladium supply has also pushed up prices. Russian producer Norilsk Nickel has reportedly announced that flooding at its mines will reduce its production by more than 1 million ounces in 2021, accounting for about 5 per cent of global supply.

The market expects a rebound in demand from carmakers and disruptions in supply to keep palladium in severe supply shortages. Citibank has raised its three-month palladium price forecast to $3200 from $3000 an ounce. SMM believes that domestic palladium supply mainly depends on imports, and domestic palladium prices will probably rise in the context of tight supply and demand abroad.