Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Palladium supply shortfall will worsen this year - Johnson Matthey

Feb. 14, 2019

LONDON, Feb 13 (Reuters) - A deficit in the palladium market that has driven prices of the autocatalyst metal to record highs will widen dramatically this year, specialist materials company Johnson Matthey said in a report on Wednesday.

The company, a leading autocatalyst manufacturer, said the shortfall in the roughly 10-million-ounce-a-year palladium market narrowed in 2018 to 29,000 ounces from 787,000 ounces in 2017, its widest in three years.

But it said stricter emissions standards would increase demand for palladium to put in catalytic converters, and supply would struggle to keep up.

“The rate of growth in secondary supplies is likely to be lower than in 2018, while primary shipments are expected to be flat,” the report said.

Palladium-backed exchange-traded funds would no longer be able to bridge the gap between supply and demand by returning metal to the market after their holdings fell to 730,000 ounces by the end of last year, it added.

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