‘Bubble’ warning for palladium, 2019’s hottest commodity
Palladium, currently at a near-$700 gap with platinum, with strikes in SA only adding to its momentum
Singapore/London — Palladium’s deficit-driven ascent has some analysts warning of the growing potential for a correction given the rapid sprint upward. The silvery-white metal used to control harmful emissions in petrol-fueled cars has surged about 40% in four months, hitting repeated records, as a supply deficit deepens and demand surges. It’s the top-performing raw material tracked by Bloomberg this year, and the threat of a strike by a mining union in key producer SA has added extra momentum this week. Yet as palladium widens its premium over other metals — including a near-$700 gap with sister metal platinum — banks, including Saxo Bank and Commerzbank say gains look increasingly unsustainable. The two metals are potentially interchangeable as pollution-reducing catalysts in vehicles, although switching requires time and money spent on research. “Palladium has entered into bubble territory,” Ole Hansen, head of commodity strategy at Saxo Bank, said by e-mail. “But as long we see...
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