Offers of Minor Metals in Europe (2016-9-19)

SMM News, October 15: Driven by multiple factors including rising inflation figures and higher‑than‑expected CPI readings, platinum‑group metals posted an overall sharp price decline. Sub‑segments within platinum‑group metals showed divergent performances. Rhodium saw a minor drop of around RMB 25 per gram today, while iridium kept climbing and tested the RMB 2,200‑per‑gram level. Ruthenium has remained strong recently; however, weighed down by shifting market sentiment from bullish to bearish across precious metals amid rate‑hike expectations, ruthenium prices held steady on poor trading volumes.

Silver prices rose initially but fell later this week, with the weekly chart forming a medium bearish candlestick and a cumulative weekly decline of nearly 7%. US September CPI beat expectations across the board, the probability of an October rate hike surged, the US dollar index hit an 18-month high, US Treasury yields stayed high, and combined with a flurry of hawkish remarks from US Fed officials and Middle East geopolitical risks, precious metals valuations remained under pressure.

This week (Oct. 8–15), platinum and palladium first fell to catch up with losses before rebounding, then slumped again after US September CPI came in above expectations. The week ended with sharp declines, with palladium falling significantly more than platinum. The most-traded PT2612 contract dropped 6.85% on the week to close at 391.4 yuan per gram, while the most-traded PD2612 contract fell 9.84% to close at 263.45 yuan per gram. Trading activity in the spot market was relatively brisk, with premiums for both platinum and palladium moving to parity with the most-traded contracts. Sticky inflation has fueled expectations of further rate hikes, weighing on valuations. Prices are likely to consolidate at lows in the near term. Going forward, the market will focus on Warsh's speech on Oct. 15, the Fed's policy meeting at month-end, and geopolitical developments.