Supporting the recent price surge in the palladium market, traders grew wary of potential supply concerns out of Russia in response to President Donald Trump’s plans to pull out of a nuclear treaty with Moscow. Trump said Saturday that Washington will step away from an intermediate-range Nuclear Forces Treaty with Russia, claiming that Moscow has been violating the treaty.
“The Russia dispute on nuclear arms raises a new wild card—sanctions on Russia could lock out 40% of the world palladium supply from the large mining complex at Norilsk [Nickel],” Jones said. “Regardless of potential for cooling of tensions with Russia[‘s] Norilsk, the largest producer of palladium in the world shows a major shortfall in palladium supply for the world in 2019 in their corporate presentation.”
Citigroup Inc. analysts including Max Layton said in a note that production will fall behind consumption by 481,000 ounces this year and deficits will persist through 2020, resulting in the “tightest” market in two decades, Bloomberg reports.
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