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Metals Focus remains bullish on Palladium in long term

iconJan 14, 2016 12:56
Source:SMM
Metals Focus has a bullish long-term view on palladium, but adds this doesn’t mean that concerns about the near term persist.

UNITED STATES January 13 2016 10:01 PM 

NEW YORK (Scrap Register): Metals Focus has a bullish long-term view on palladium, but adds this doesn’t mean that concerns about the near term persist. 

The commodity was down some 17% for the year so far as of Tuesday, even though most analysts anticipate a supply deficit in 2015. The main driver appears to be weakness in U.S., Chinese and other equities, said Metals Focus. 

Also, while there may be an annual supply-production deficit, there is nevertheless a persistent inventory overhang, the consultancy continues. 

Metals Focus estimates that by end-2015, there were 13.7Moz of palladium stocks in the market, accounting for 16 months of demand.

This leaves palladium prone to investor whims. Still, the consultancy anticipates growth in auto-catalyst demand for the metal, with the above-ground inventory likely to be halved by 2020.

“With this in mind and given our belief that eventually market fundamentals will reassert themselves, we remain palladium bulls in the long run,” said the consultancy. 

“At the same time though, it would be misleading to say we are not concerned about the near-term prospects for the metal. Western investor attitudes towards China and other emerging markets are so negative they are reminiscent -- and indeed the mirror image -- of their over-exuberance only a few years ago,” Metals Focus added.


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