Page 16 - Bullion World Volume 4 Issue 10 October 2024

Bullion World | Volume 4 | Issue 10 | October 2024

So while the demand profiles for palladium and rhodium Nornickel, the world’s largest palladium producer, has
are threatened, long-term forecasts are fraught with reported that it is ahead of its 2024 production schedule
uncertainties. What we can say is that, worst case, by although Red Sea navigation issues mean that it has had
the late 2030s an industry that currently comprises 80% to increase its inventories. Amplats and Implats in South
of palladium demand could be becoming a net supplier Africa, meanwhile, are working off some of the inventory
of metal into the market. of untreated material that built up during load shedding.

On the supply-side, the palladium and rhodium price Platinum is likely to post a deficit this year equivalent to
falls, and issues with supply of South African energy, are roughly two weeks’ global industrial demand and three
still key issues. Load-shedding in South Africa ceased weeks’ in 2025; palladium looks like a six-week deficit
on 1st April, although the CEO of Eskom, the State this year and five weeks’ in 2025.
energy supplier, has warned that outstanding large bills
may yet threaten the company’s operations. Meanwhile the stay of execution for demand, prompted
The major South African producers (70% of world by the hybrids’ incursion at the expense of BEVs, is
platinum mine production and 54% of global supply) currently supporting palladium and the massive NYMEX
have been restructuring with impact on workforce shorts, in place for much of 2024 in anticipation of long-
numbers but not, as yet, production. In North America, term developments, have recently contracted heavily to
the Sibanye-Stillwater mine, which has been burning levels prevailing as far back as January. This, with the
cash, is being put onto partial care and maintenance as Sibanye announcement, helped to fuel the September
part of a restructuring programme. rally towards $1,120.

Source: CFTC via Bloomberg; Design: StoneX

The longer term outlook makes it difficult to justify any sustainable recovery in palladium prices. Probably the
best that can be said is that industrial de-stocking will come to a halt eventually, but for now the market remains
hamstrung. The outlook for platinum is better, especially if fuel cells gain traction on the road. Meanwhile the
industries’ sabres remain drawn.

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