Commodity Check: Palladium price surges to record highs as commodities’ supercycle gathers pace

The palladium market has been in deficit since 2012, and usage is increasing as countries like China are tighten regulations to crack down on pollution from vehicles

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HARARE – Commodity prices are recording classic moves. Since the turn of the year, we have seen vaccine-led economic recovery and increased commitment by world governments fronted by the United States (U.S) into green energy and infrastructure projects.

This has helped propel the price momentum of commodities across the board with everything from metals, energy to agriculture markets, trading near multi-year highs.

Last week on Friday, palladium touched an all-time record high of $3,007.73 per ounce, the first time it has reached $3,000 surpassing the previous record set in February 2020. According to online website Metals Daily, the price of the Platinum Group Metals (PGMs) has retreated to $2,992.00 as of Tuesday 4 May 2021– 11 AM CAT.

It is a confluence of factors that are driving palladium. Prices have climbed more than 17% in 2021, building on five straight annual gains, and more than 20% since March 16 when Russia’s Nornickel, the top producer, announced that flooding at two of its mines would reduce output.

The price surge is in line with analysts’ projections, as we covered in an earlier column. The palladium market has been in deficit since 2012, and usage is increasing as countries like China are tighten regulations to crack down on pollution from vehicles, forcing automakers to increase the amount of precious metal they consume.

In Europe, consumers are buying fewer diesel cars, which mostly depend on platinum, and choosing gasoline-powered vehicles, which use palladium, following revelations that makers of diesel cars cheated on emissions tests and as concerns about diesel pollution intensified.

Zimbabwe’s Positioning

Palladium is found as the free metal associated with platinum and other platinum group metals as well as with nickel and copper deposits (from which it is recovered commercially).

Zimbabwe, after South Africa, has the world’s second-biggest platinum deposits on the Great Dyke. An estimate of 2.8 billion tones PGM ore at 4g/t 4e is estimated to lounge on the Dyke.

The country’s platinum producers include Zimplats and Mimosa which are owned by Impala Platinum and Unki which is owned by Anglo-American Platinum, all headquartered in South Africa.

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