Palladium Capped at $875 in 2011 on Japan Quake, Impala Says
Palladium prices will be capped at $875 an ounce in 2011 as demand is deferred because of damage to car production following Japan’s magnitude-9 earthquake and 23- foot tsunami on March 11, said Impala Platinum Holdings Ltd. (IMP)
Impala, the third-biggest producer of the metal, lowered its estimates for the palladium price in 2011 to between $725 and $875 an ounce, Derek Engelbrecht, head of marketing, said in an e-mail. Impala in February forecast prices at $775 to $950 an ounce.
“The market will trade a little lower,” Engelbrecht said. The “drop in demand for palladium should not exceed 100,000 ounces,” and consumption will catch up from the end of 2011 and into 2012, he said.
Tightening monetary measures in China and the European debt crisis may reduce vehicle and palladium demand, he said. The palladium market will still post a 500,000-ounce shortage in 2011, while exports from Russia won’t have a “material impact on the market,” Engelbrecht said.
Palladium for immediate delivery was up 0.6 percent at $759.25 an ounce by 4:13 p.m. in London, bringing the decline for the year to 5.3 percent.
Demand for car pollution-control devices, which use palladium, prompted record 2010 consumption and the biggest shortage in a decade, Johnson Matthey Plc said May 16. Russian sales, the fourth-biggest source of 2010 supplies, will drop to “several hundred thousand ounces” this year, said Johnson Matthey, supplier of one in three auto catalysts.
Impala ranks third in terms of production after Russia’s OAO GMK Norilsk Nickel and South Africa’s Anglo American Platinum Ltd., according to GFMS Ltd.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
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