Has Palladium Over-Achieved?
Palladium fuels catalytic converters fitted to cars, turning dirty air into clean air. That’s a top priority given the planet’s environmental emergency, so miners are especially busy in producing the atomic number 46 metal.
Longer-term, it’s all about inflation plotting the enduring trend line of palladium’s market price. Expected currency exchange rates decided on the Forex market also play a key role as the metal crosses borders, but right now, supply and demand dynamics mean everything!
As electric cars come without pollutive fumes, catalytic converters’ days are numbered. However, calls for palladium in jewelry, fuel cells, electronics, dentistry, and medicine keep getting louder. The world’s biggest supplier, Nornickel, is only promising 85 tons by year-end. Whether that will deepen an ongoing supply-side deficit is technically unknown, but it doesn’t need to be known!
Speculators have already decided that there won’t be enough to go around, propelling palladium in markets. Currently, nine out of ten Invstrs are bullish on the commodity, with over $1.3 billion invested. So far, so good, too. Almost three-quarters of trades are in-the-money. If only industry insiders weren’t calling it all one big bubble.
“Underlying industry demand is evolving quickly, but it’s not evolving as quickly the price move seems to suggest,” said Anton Berlin, Nornickel’s head of market development. Bulls think he’s reading off a teleprompter, trying to inspire customer confidence in the miner’s production capacity or suppress high prices that actually harm his underlying industry. Bears believe that if anyone knows Palladium’s final destination, it’s Mr. Anton Berlin!
