The palladium market will tend to balance throughout the year

The “Platinum 2010 Mid-year Almanac” published by Johnson Matthey recently stated that the total palladium demand in 2010 is expected to increase by 15% to 278.1t with strong automotive and industrial demand. The supply of palladium will not change significantly, and is expected to be 222.1 tons, plus 57.4 tons of palladium, which is expected to be recovered from waste car exhaust catalysts, jewelry, and electronics. It is expected that there will be a very small surplus of 1.4t in the palladium market in 2010, tending to balance.

On the supply side, although supply in South Africa, Russia, and Zimbabwe is expected to rise slightly in 2010, the sale of Russian treasury stocks is estimated to contribute about 30 tons this year. However, North American supply is expected to fall by 26% to 17.4 tons, which largely offset the growth in other regions. Therefore, the palladium supply in 2010 is expected to be 222.1t, which is roughly flat, which is only 1.3t higher than the previous year.

On the demand side, with the full recovery of the auto industry in various regions, the total palladium demand in the global auto industry in 2010 is expected to increase by 27% to 160.2 tons. The recovery of light vehicle production in all regions, especially the rapid increase in the production of gasoline vehicles in China, is expected to be the cause of this increase in demand. Consumer purchases of electronic goods are also expected to boost palladium demand for multilayer ceramic capacitors that are common in consumer electronics. It is expected that the total demand for palladium in industrial applications will increase by 8% to 77.4t in 2010, almost returning to 2008 levels. In addition, investors' preference for exchange-traded securities is expected to increase the demand for palladium spot investment to 20.8t. However, the weakening of trading interest in China and other countries will also make the demand for palladium jewellery in 2010 is expected to drop by 19% to 19.6t.

Regarding the trend of palladium in the next six months, Johnson Matthey said that due to the steady increase in demand for automobiles and industry, the forecast for palladium is generally positive. In addition, there are still many uncertain factors in the market that will affect the trend of palladium. Sovereign debt problems and fiscal austerity measures of developed countries may plague economic growth; China, the second largest palladium market in 2010, may also seriously affect the balance between supply and demand if economic growth is slow; and if Russia does not sell its treasury in 2011, In stock, there will be a serious shortage of palladium market. These pressing supply and demand fundamentals keep investors from thinking that the relative price of palladium is too low. Continuing speculative investment interest may significantly change prices. Johnson Matthey expects that the average price of palladium will be 710 US dollars per ounce in the next 6 months, the highest trading price is 850 US dollars, and the transaction price can not be less than 550 US dollars.