Palladium Production

Source: "Platinum 2010" by David Jollie (from Johnson Matthey)
Supply
1'000 oz	2005	2006	2007	2008	2009
South Africa	2'605	2'775	2'765	2'430	2'370
Russia
Primary	3'135	3'220	3'050	2'700	2'675
Stock Sales	1'485	700	1'490	960	960
North America	910	985	990	910	755
Zimbabwe	125	135	135	140	180
Others	145	135	150	170	160
Total Supply	8'405	7'950	8'580	7'310	7'100
Total Production	6'920	7'250	7'090	6'350	6'140
Gross Demand
Autocatalyst	3'865	4'015	4'545	4'465	4'050
Chemical	415	440	375	350	325
Dental	815	620	630	625	615
Electrical	1'275	1'495	1'550	1'370	1'270
Investment	220	50	260	420	625
Jewellery	1'490	1'140	950	985	815
Other	265	85	85	75	70
Total Gross Demand	8'345	7'845	8'395	8'290	7'770
Recycling
Autocatalyst	-625	-805	-1'015	-1'140	-965
Electrical	-305	-290	-315	-345	-395
Jewellery	-60	-135	-235	-130	-70
Total Recycling	-990	-1'230	-1'565	-1'615	-1'430
Total Net Demand	7'355	6'615	6'830	6'675	6'340
Movements in Stocks	-435	635	260	-325	-200
1 t = 32'150.75 oz
t	2005	2006	2007	2008	2009
South Africa	81.02	86.31	86.00	75.58	73.72
Russia
Primary	97.51	100.15	94.87	83.98	83.20
Stock Sales	46.19	21.77	46.34	29.86	29.86
North America	28.30	30.64	30.79	28.30	23.48
Zimbabwe	3.89	4.20	4.20	4.35	5.60
Others	4.51	4.20	4.67	5.29	4.98
Total Supply	261.42	247.27	266.87	227.37	220.83
Total Production	215.24	225.50	220.52	197.51	190.98
Gross Demand
Autocatalyst	120.21	124.88	141.37	138.88	125.97
Chemical	12.91	13.69	11.66	10.89	10.11
Dental	25.35	19.28	19.60	19.44	19.13
Electrical	39.66	46.50	48.21	42.61	39.50
Investment	6.84	1.56	8.09	13.06	19.44
Jewellery	46.34	35.46	29.55	30.64	25.35
Other	8.24	2.64	2.64	2.33	2.18
Total Gross Demand	259.56	244.01	261.11	257.85	241.67
Recycling
Autocatalyst	-19.44	-25.04	-31.57	-35.46	-30.01
Electrical	-9.49	-9.02	-9.80	-10.73	-12.29
Jewellery	-1.87	-4.20	-7.31	-4.04	-2.18
Total Recycling	-30.79	-38.26	-48.68	-50.23	-44.48
Total Net Demand	228.77	205.75	212.44	207.62	197.20
Movements in Stocks	-13.53	19.75	8.09	-10.11	-6.22

World Vehicle Productions

World cars and commercial vehicle production statistics according to OICA:

Platinum Investment

Reuters: Redemption possible for platinum group ETFs

Physical investment demand for platinum rose 19 percent in 2009 to 660,000 ounces, boosted by strong growth of platinum and palladium ETFs, Johnson Matthey said.

Rhind said that investment alone, which represented less than 5 percent of total demand, was not enough to keep driving prices higher.

...

Autocatalytic converter demand traditionally accounts for half of the world's total platinum consumption. Last year, auto-sector buying fell to just 32 percent, JM said.

Businessweek: Chinese Platinum Jewelry Demand to Weaken, Johnson Matthey Says

Platinum investment demand rose 19 percent to 660,000 ounces last year, while palladium investment advanced 49 percent to an all-time high 625,000 ounces. ETF Securities Ltd. started exchange-traded funds backed by both metals in the U.S. at the beginning of the year.

...

Palladium may climb to a nine-year high of $700 an ounce in the next six months as the metal’s 2009 surplus of 760,000 ounces narrows, Johnson Matthey said. Palladium more than doubled in 2009, the best performance since at least 1993, and is up 26 percent this year at $514. The metal is unlikely to fall below $475 in the next six months, Johnson Matthey said.

Well, that is funny, because the free fall of the Palladium price before 2009 was just as stunning as its recent come back. The drop this week wasn't bad either, and now 475 looks already distant and sky high. Well, just show's that reading any predictions of people who don't show a track record is just a waste of time (and people who do have a respectable track record seem to make no specific predictions).

Total rhodium demand fell 21 percent last year to a 10-year low of 529,000 ounces, widening the metal’s surplus to 241,000 ounces, and Johnson Matthey said it expects another “large” surplus this year. The metal has gained 12 percent this year to $2,800 an ounce. Rhodium is mainly used in auto catalysts and also in the chemical and glass industries.

...

Ruthenium demand fell 18 percent to 574,000 ounces last year, and iridium consumption slipped 11 percent to 91,000 ounces, Johnson Matthey said. Ruthenium is mostly used for coating computer hard disks and iridium is used in spark plugs and for growing metal oxide crystals.

Pandemic Palladium

From Kitco:


Platinum, Palladium Suffer Serious Technical Damage This Week - Kitco News, May 20 2010 10:22AM

Palladium Has Biggest Two-Day Drop in 12 Years; Platinum Falls - Businessweek, May 20 2010 3:45PM

Europe’s debt crisis and slowing growth in China may erode consumption of the metals used mostly for pollution-control devices in cars. Ford Motor Co.’s deliveries in main European markets fell 17 percent in April, the first drop in 11 months. In two days, palladium dropped 19 percent, the most since May 1998. Before this month, the price surged 36 percent in 2010.

...

“People should make sure they’re the first out of the exit and not the last,” Sorrentino said.

Prices gained for 12 straight months through April. The introduction of an exchange-traded fund backed by the metal in January boosted demand, Selkin of National Securities said. An ETF for platinum was also launched in New York this year.

“There’s very high speculative interest” in the metals, said Walter de Wet, an analyst at Standard Bank Plc in London. “With risk as high as it has been, we expect to see some liquidation.”

Last not least, Jesse on Gold options/futures:

Gold and silver spot was holding the exact levels where I would have expected them to find something to hang on. Let's see stocks go into option expiration tomorrow. There are a lot of calls that are going to be expiring worthless. I wonder if they will try and jam the puts for a little whipsaw action.

I will be a little surprised if they let gold up for air before its own expiration next week.

And:

The market is rallying sharply now, and if it can retake the old support, now resistance, around 1105 it has a good chance of setting a new uptrend back to the top of the channel. This could just be a bounce. I was looking at some of the indicators last night, and they were at record oversold levels going back at least four years, including the crash.

Was all this a trading gambit mixed with petulance over the financial reform package? In a normal market I would say "nonsense." But this market is thin, like a Ponzi scheme, driven by high frequency trading and artificial liquidity. The few genuine investors are being chased and shot down like the human beings in The Planet of the Apes. The Wall Street gorillas have all the horses, nets and rifles, courtesy of the government, the regulators, and the Fed.

The smackdown in gold and silver ahead of option expiration next week, and the miners' option expiration today, was some of the most blatant and heavy handed market manipulation I have seen in a long time.

The Open Interest on the June Gold contract on May 20 increased from 216,811 to a whopping 273,541 contracts on a sharp decrease in price. This was some viciously aggressive short selling intended solely to drive down price, taking the miners down and out of the hands of the public, and weakening the resolve of the Comex gold bulls. There were roughly 18,000 call options sitting at Gold 1200 earlier this week representing 18 million ounces of gold.

Palladium & Rhodium

From Johnson Matthey's 1h2009 report regarding palladium and rhodium in general:

The palladium market is expected to remain in fundamental surplus in 2009. Net demand is forecast to be down by 4%, although autocatalyst demand will fall less than for platinum as scrappage schemes introduced in many countries have favoured sales of small engined, gasoline powered vehicles which use palladium based technology. The booming automobile market in China is also supportive of palladium demand due to the dominance of gasoline engines. Industrial demand is expected to fall, with soft consumer demand leading to a downturn in the use of palladium in electronic applications. Although total demand will exceed mine supplies, significant sales of metal from Russian state stocks will keep the market in surplus. The average price for the first half of Johnson Matthey’s financial year
was $255/oz, down 35% compared to the same period last year.

In general, platinum can also be used in diesel catalysts, palladium is so far mostly used in standard gasoline engines. For this purposes, palladium and current levels is much cheaper and therefore preferred by manufacturers, however more palladium is needed per catalyst than when platinum is used.

The rhodium market has been relatively calm in comparison to 2008 when a record price in excess of $10,000/oz was recorded in the first half of the year before collapsing to less than $1,000/oz by November. With demand subdued due to falling car production, rhodium is expected to be in surplus in 2009. The price is nonetheless trending modestly higher in what is a small and often volatile market. The average price in the first half was $1,509/oz, substantially lower than an average in excess of $8,000/oz recorded in the same period last year.

Rhodium is also used in the jewelery business, bought in grams, and then fumed over other white precious metals to make it even more shining!

Precious Metals Trends

Google Precious Metals Trends


Search trend factors as of 2009-11-24:

Gold      1.0
Silver    0.57
Platinum  0.18
Palladium 0.04
Rodium    0.0