Palladium was the envy
His journey to the heights will not stop. The palladium, precious metals and rare platinum family, sees her classes skyrocket since the beginning of the year. Last Wednesday, the metal rose to 551.40 dollars an ounce, its highest level since early March 2008. One that contrasts sharply with that of December 2008, when palladium was quoted at $ 161 an ounce.
The metal was then hit by the crisis in the automotive industry which represents 50% of global demand. But the latter had declined 13% on average in 2009, the decline in other markets (jewelry, dentistry or chemistry) is unrepresentative.
The automotive industry uses palladium for catalytic converters for cars. This silver is resistant to corrosion and most importantly, it has the ability to absorb hydrogen and thus reduce the toxicity of exhaust gases.A key element in a time of anti-pollution standards imposed on the sector. Palladium has also initiated a frank increase in December 2009, when the summit was held in Copenhagen …
China stirs prospects
The increase in auto sales in March in Europe and the United States thus partly explains the renewed interest in this metal. But it is good to the Chinese automotive market as all investors are now looking. China became the world's biggest car market to the U.S. last year, grew its sales by 55.8% yoy to 1.74 million units, registering a new monthly record.
"Platinum is used in catalytic systems for diesel engines while palladium team mainly gasoline cars.Yet it is these that equip the Chinese fleet, "said Arnaud du Plessis, head of the center ring and co-manager of the Fund International Fructifonds Now Natixis Asset Management. The prospects are interesting while the country's auto sector is undergoing renewal. The equipment rate is 8 cars per 1,000 inhabitants, against 502 or 745 in Japan to the United States. There should be more cars in China than the United States in 2020! .
The country, considered one of the worst polluter on the planet, is also expected to increasingly move towards cleaner technologies. "These are the industry perspectives that make the market upwards," says the analyst.
Speculation
Another element of explanation of rising prices is the financial interest that is now the Palladium for speculators.Last January, three index funds based on platinum and palladium have been introduced in Switzerland and the U.S. fast cash. These ETFs (exchange traded funds) allow investors to bet on palladium and platinum without the hassle of bullion.
"These ETFs are attractive in this small market. We have already seen with the gold. For the first time in 2009, the new demand for ETFs has surpassed that of jewelry. In other words, the financial demand has exceeded industrial demand. This could also happen with palladium, "says Arnaud du Plessis. "The precious metals are generally an asset class in its own right, whereas before, this small market was more restricted to industrial.Now, it helps to diversify the portfolio because these metals are not highly correlated with the rest of the market.
The Russian market queen
Investors also expect the risk of reduced supply. The production of palladium is in fact highly concentrated: Russia and South Africa alone is home to 90% of recoverable reserves. Russia has secured a strategic stockpile in the years 70-80 which allowed him to play on the market. Norilsk Nickel, the first world producer of nickel and palladium, has also often been accused of restricting its exports for political purposes. In 2000, for example, it has put on the market 161.7 tons while demand was estimated at 261.3 tons. Today, the size of these stocks is a closely guarded secret by the Russian government, but experts believe it would be very low.
The fear of a weakening of the offer comes as problems faced by South African producers. The weakness of the country's electricity network is anticipating trouble to keep active mines, very energy intensive. In early April, prices surged after the announcement by the British mining group Lonmin, a restructuring plan employee departures in 5500 its mines in South Africa.
Attracted by the potential of palladium, the most marginal American players are emerging. "With rising prices, mining, the extraction is more expensive to go back into production," said Arnaud du Plessis. For the latter, the palladium market should still be stabilizing: "It is close to the top of 2008 with close to one ounce of $ 600. From this threshold, it will be more careful, "he says.Natixis analyst warned: "Market fundamentals still remain bullish, at least as long as no alternative method of palladium for catalytic converters will be discovered. In this case, the impact will be extremely negative. "
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