Palladium market to remain in deficit as Russian shipments decline – Barclays

May 28, 2015 - 8:50 PM GMT
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Russian palladium shipments to Switzerland hit a two-year low in April of just 36,000 ounces, which was down 59 percent year-on-year and signals tighter fundamentals and a building global deficit, according to Barclays Research.

The Russian government holds an unknown stockpile of palladium that it funnels through Switzerland. Traders and analysts closely watch Swiss trade data to glean information on exactly how much Russian palladium will be hitting the market to determine pricing.

“We maintain the view that palladium mined is sold into the market, and even though it appears there are stocks held by the government, outside of the state repository, we believe the palladium market will remain in deficit. Palladium holds the most constructive outlook across the precious metals,” said Barclays, which estimates a deficit of 537,000 ounces in 2015.

Russian palladium shipments were 1,610 ounces in April, in-line with the previous two months after a one-off January spike.

Shipments from Russia to China have fallen by a third through April, while they have increased into Hong Kong.

Swiss imports in April declined 48 percent from March and are down 17 percent year-over-year. Mostly due to fewer shipments from South Africa and slowing imports from the US.

(Editing by Tom Jennemann)