Palladium climbs amid geopolitical tensions

Geopolitical tensions in Eastern Europe have exacerbated the energy crisis. The oil bill is soaring. The platinum group, which includes platinum, palladium, rhodium or osmium, also saw its prices climb. Very telling example: palladium. This metal, widely used by the automotive industry for catalytic converters for petrol vehicles, has gained 16.6% since the 1^er January, at $2,221 an ounce.

” With Russia accounting for nearly 40% of the world’s palladium supply, concerns over supply disruptions should tensions escalate with Ukraine have supported the white metal in recent weeks. “Commented at the beginning of February an analyst from UBS. ” The armed conflict with Ukraine could trigger severe sanctions against Russian metal-exporting industries and drastically reduce the global availability of palladium, pushing its price up”continues Societe Generale in a note.

Volatility

This trend reversal comes as palladium had one of the worst performances among the metals last year (-22%), from the bottom of shortages of semiconductors which hit car manufacturers. For Ben Laider, global markets strategist at eToro, quoted by Bloomberg, the reasons for the rebound are clear: on the one hand, the risk of sanctions against Russia, on the other hand, the recovery of the automotive market, which represents 85% of Requirement. ” Palladium is likely to remain volatile over the next few weeks as an escalation in the dispute pushes prices higher, while a de-escalation should allow the price to stabilize predicts UBS.

This Tuesday, the apparent lull on the Russian-Ukrainian front led to a 6% drop in palladium prices. The Russian army has begun the withdrawal of troops engaged in maneuvers near the borders of Ukraine and their return to their bases, announced the Russian agency Interfax, citing the Ministry of Defense. Another element explains the rapid price movements: the scarcity of the metal, which was in deficit for the tenth consecutive year last year.