Palladium Market Update (April 5, 2013)

March began with palladium trading at $728, but prices rose through the first half of the month, going up to $785 in New York on March 8.

Price declines seen in the third week of March were attributed to concerns over financial events in Cyprus. A week earlier, the metal started out in London trading at $776. The following Monday, the price dropped to $761, and Wednesday, it was lower, at $742.

Palladium prices reacted positively to news that South Africa and Russia, which account for vast majority of the world’s platinum group metals supply, have signed an agreement to work toward a coordinated trading arrangement that some are comparing to the Organization of the Petroleum Exporting Countries, Fox Business reported.

Palladium in London jumped from $758 on March 26 to $767 on March 28. On a global basis, palladium averaged $756 in March.

Along with other metals, palladium began April under selling pressure. Money and interest continue to be lured away from commodities and into equities. Even positive US auto sales data did not prevent palladium from falling. On April 1, palladium traded at $782 in New York. At last, on April 4, the price was $733.

Market participants continue to note that fundamentals for palladium remain strong. Several firms have, however, noted that historically, May and June are weak months for palladium. A Standard Bank report states that the metal has seen month-over-month declines during this period every year since 2003.

“While we expect large fundamental deficits in the palladium market this year and next, we also believe that above-ground inventory remains more than sufficient to see prices lower than the current level around $760,” the Standard Bank report also notes.