Metals analysts also noted that any uptick in labor unrest in South Africa, the second-largest palladium producer, could push prices higher. That scenario has come to pass.
“In addition, talks aimed at ending the strike that has halted the South Africa platinum and palladium (PGM) industry for over 6 weeks collapsed last Wednesday. So far, the strikes have taken about 320,000 ounces of platinum off the market, equivalent to almost 6% of 2013 global production. The prices of platinum and palladium have started reacting to the prolonged strike as producers’ stocks are fast approaching depletion. We remain fundamentally bullish on platinum and palladium but recognize recent gains represent an attractive opportunity to book some profit for the more tactically orientated. Longer term, the PGMs remain attractive for portfolio diversification and price appreciation in a sector that appears to increasingly be suffering from a structural deficit,” said ETF Securities in the note.
The ETFS Physical Platinum Shares (NYSEArca: PPLT) is up 6.8% in the past month.
ETFS Physical Palladium Shares
ETF Trends editorial team contributed to this post.