Palladium and platinum to top $3,000/oz and $1,350/oz respectively over the next 12 months – TDS

Platinum and palladium have surged in recent weeks. As the global economic recovery continues and global pollution standards tighten, the recent mine site disruptions suggest hefty deficits and a path toward $3,000/oz for palladium and $1,350/oz for platinum over the next twelve months, strategists at TD Securities report.

Key quotes

“The recent mine site problems and the resulting lowering of production guidance by Norilsk should see the supply-demand conditions become even tighter. It is estimated that 2021 production from the impacted mine operations will directly reduce platinum production by some 185koz in 2021, with a reduction of some 681koz for mined palladium supply. However, there will be a 100koz offset for palladium, as the company uses above ground supply to deliver more to the market than what comes out of the mines.”

“The palladium market should record a massive defect of some 1.16 million oz in 2021 and some 600kz in 2022, with platinum showing a deficit of 250koz and 16koz over the same period. This suggests that palladium could again challenge the pre-COVID high of $2,883/oz recorded back in March 2020, with a path to $3,000/oz very much in the cards.” 

“Platinum should trade at the highest level in well over seven years, topping $1,350/oz over the next twelve months. Traders should also expect very robust jumps in lease rates, as the front end of these markets tighten up.”