JAPAN March 16 2017 10:06 AM
TOKYO (Scrap Register): Citi Research pointed out that there has been a divergence in investment interest in palladium on the Tokyo Commodity Exchange compared to the New York Mercantile Exchange.
Japan historically has been critical for demand for platinum group metals, even though total consumption has eased slightly since 1975 due to slowing population growth and stagnating vehicle sales.
However, total Japanese demand still remains key to the global market balance, comprising, 16% and 13% of platinum and palladium demand, respectively.
“As such, price remains paramount to Japanese investors who have had a longstanding and significant interest in platinum group metals,” analysts at Citi added.
According to the bank, Japanese investors tend to want to wait for a better bargain, with yen-denominated price remaining a hurdle.
Tocom non-commercial platinum net length has fallen 26.4% year to date to 18,000 lots as of March 10, while these traders have become increasingly net short in palladium.
By contrast, non-commercial net length for both platinum and palladium on Nymex have risen 51.9% to 39,000 lots and 20.1% to 17,000 year to date, respectively, as of March 7.