Fsurges and sudden plunges: palladium is dragged into the throes of speculation. Already subject to these erratic journeys, the metal sets off again for a new round of merry-go-round. With the invasion of Ukraine by Vladimir Putin’s Russian troops, everything is accelerating. Palladium and roller coaster…
Let us judge. On Monday, March 7, the price record for this metal prized by jewelers was shattered. In session, it traded at 3,442 dollars (3,110 euros) an ounce, before falling back slightly. It thus surpassed, foot to the floor, its highest level, reached in May 2021, above the bar of 3,000 dollars an ounce. Palladium at its best. A week later, sudden braking. The gray metal was backpedaling at $2,400 an ounce. An air gap of nearly 30%. On Friday March 18, its price once again exceeded 2,500 dollars an ounce, thus signifying an increase of nearly 40% compared to that of the 1er January.
An illustration of panic in the financial markets. According to the hopes for a settlement of the Russian-Ukrainian conflict, anticipations as to the impact of economic sanctions, concerns about logistical disruptions, investors reacted quickly. At the risk of causing high volatility, when the needle of the market compass keeps changing direction.
Investors question the health of demand
No question of doing without palladium, trumpet the European car manufacturers. A pinch of this material slips into exhaust pipes to filter polluting emissions from gasoline engines. With the strengthening of environmental legislation, this component has become strategic. However, Russia is the leading supplier, with nearly 40% of world volumes, ahead of South Africa, which extracts a third.
The French government may have agreed to subsidize companies until the end of 2022 to help them depend less on certain critical raw materials from Russia, such as titanium, palladium or neon – according to the “plan de resilience” presented on Wednesday March 16 – the demand will not dry up. The sanctions decreed by the European Union in response to the war have therefore carefully avoided interrupting the trade flows of palladium, in the same way as that of nickel.
In the event of economic cooling and shortage of components, will car sales slow down?
Tempers then flared, imagining supply disruptions due to restrictions on air transport with Russia. However, the precious metal does not only hover on the markets, it also flies towards its destination customers. Vladimir Potanin, the boss of the world’s biggest palladium producer, MMC Norilsk Nickel PJSC, said he could reroute those lines to ensure deliveries.
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