Investor Alert
Myra P. Saefong

Commodities Corner Archives | Email alerts

Dec. 12, 2019, 2:23 p.m. EST

Palladium’s up 60% year to date, as prices top $1,900 to new record

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Platinum Group Metals Ltd. (PLG)

or Cancel Already have a watchlist? Log In

By Myra P. Saefong, MarketWatch

Palladium futures have set fresh records each day since Dec. 4, according to Dow Jones Market Data

A move past $1,900 an ounce on Thursday for palladium futures marked a fresh record for the precious metal, taking its year-to-date tally to a gain of roughly 60%.

On Thursday, the most-active March palladium contract rose $29.10, or 1.5%, to settle at $1,914.20 an ounce on Comex after tapping a record intraday high of $1,919.90. The settlement marked a record finish.

Futures prices have set new records every day since Dec. 4, on an intraday and settlement basis, tracking data that go back to November 1984, according to Dow Jones Market Data. Year to date, prices based on the most-active contract trade roughly 60% higher.

Widespread power outages in South Africa have led to a decline in platinum group metals (PGM) production in the nation. South Africa’s mining production fell for a third month in a row, down 2.9% year on year in October, with PGM production down by 4.8%, according to South Africa’s Independent Online on Thursday . The news website cited data from Statistics South Africa.

“Stories of the South African power crisis and cuts to production are the latest market chat ‘excuse’,” said R. Michael Jones, chief executive officer of Platinum Group Metals Ltd. /zigman2/quotes/202722078/composite PLG +0.96% . However, the true reason for the rally in palladium prices is “growing demand and shrinking supply,” he told MarketWatch in emailed comments, adding that “power challenges are real and short term.”

“All the power crisis does is stretch a supply problem,” like a “rubber band–that much tighter,” said Jones.

“The real problem is emission standards are tighter, needing more metal and the platinum mines that produce 40% of the palladium are old and deep, plus palladium is just a by-product,” he said. The high palladium prices helps, but that’s “not enough to make declining mines come alive.”

Palladium is primarily used in catalytic converters for vehicles with gasoline-powered engines, which help control harmful emissions from car exhausts.

In a note Thursday, analysts at Zaner Metals said that power generation in South Africa has recovered, but “the structural problems remain and heavy load requirements from hot seasonal temperatures ahead are likely to produce more blackouts.”

On a technical basis, “the path of least resistance…remains up in palladium, with critical support seen at $1,883.70 and uptrend channel resistance seen today at $1,933.80, and then at $1946.10 on Friday,” they said.

US : U.S.: NYSE American
$ 2.10
+0.02 +0.96%
Volume: 133,252
Sept. 25, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$131.77 million
Rev. per Employee

Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.

This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »

Partner Center

About Myra Saefong

RSS News feed

Myra P. Saefong is on the markets team in San Francisco. She has covered the commodities sector for MarketWatch for more than 10 years. She has spent the...

Myra P. Saefong is on the markets team in San Francisco. She has covered the commodities sector for MarketWatch for more than 10 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005. Myra has been with MarketWatch since 1998 and holds a master’s degree in English literature.

More from Myra Saefong

Featured Commentary »

Link to MarketWatch's Slice.