Palladium inflated with helium

Raw materials. Once again, palladium defies the gravitational laws of the financial markets. The metal reached, Wednesday, April 21, a new all-time high at 2,895 dollars an ounce, shattering its previous record of February 2020. Propelled into ethereal space like Thomas Pesquet in his rocket. Already, in 2017, some were wondering about the beginnings of the rise of this precious metal. Since then, despite a few air holes, its trajectory tangents the vertical, for the fifth year in a row. Passing the price of 1000 dollars an ounce, then 2000, before continuing to climb with, now, in the crosshairs the 3000 dollars an ounce. Palladium flies from record to record.

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Enough to make the gold of jealousy pale. Even if it briefly crossed the mythical $ 2,000 per ounce mark in August 2020, carried by cautious investors in the midst of the Covid-19 pandemic, the yellow metal looks gray. Surpassed by its competitor in a hurry and, since, largely behind. Especially since gold, even if it finds a little color, is currently trading around 1,800 dollars an ounce.

Catalytic converters

How to explain it? By betting on the gray metal, investors are making a bet. The economies, shaken by the pandemic, will rebound, and the automotive industry, after having idled, will be one of the beneficiaries of this restart.

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However, a few grams of palladium slip under the hood of cars, more precisely in catalytic converters, to filter polluting emissions from gasoline engines. An outlet which absorbs nearly two thirds of world production.

This fear of a supply struggling to meet demand is precisely the powerful engine of speculation.

The appetite of manufacturers, supported by the tightening of environmental measures in China and in Europe, would fuel the structural deficit of this market. This fear of a supply struggling to meet demand is precisely the powerful engine of speculation. The fever has further risen by a few degrees after the setbacks of Russian giant Norilsk Nickel, the world’s largest supplier of palladium. In February, two of its mines in Siberia were flooded, bringing mining to a halt. The group estimated the time needed to completely restart the machine at a few months.

The analysts took out their calculators. Some are counting on a deficit of one million ounces of metal in 2021. Something still to blow on the embers. This meteoric rise in palladium, but also nickel, shines the spotlight on Vladimir Potanin. Principal shareholder of Norilsk Nickel, the oligarch holds the title of richest man in Russia, with an estimated jackpot of 25 billion euros in 2020, according to the ranking Forbes.

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