Palladium shortage extending on record car sales

Metals Research

The most-accurate analysts tracked by Bloomberg aren’t anticipating a repeat of that this year. Eugen Weinberg, the head of commodity research at Commerzbank AG in Frankfurt, expects a fourth-quarter average of $950, while Michael Widmer at Bank of America in London projects $800. Tom Kendall, the head of precious-metals research at Credit Suisse Group AG in London, forecasts $770. Palladium for immediate delivery rose 0.1% to $670.70 an ounce at 11:43 a.m. New York time.

Equity analysts are bullish too. OAO GMK Norilsk Nickel, the biggest producer, will report a 15% gain in profit this year to $3.34 billion, according to the mean of seven estimates compiled by Bloomberg. Shares of the Moscow-based company rose 17% in 2012. Those of Johannesburg-based Anglo American Platinum Ltd., its nearest rival, retreated 16% as strikes disrupted work at its South African mines.

Chinese sales of passenger vehicles rose to the highest in almost two years in November, the China Association of Automobile Manufacturers said Dec. 10. Sales should increase by about another 10% in 2013, Xu Changming, the director of information resource development at the State Information Center, part of the nation’s top economic planning body, said at a conference about two weeks earlier.

“The expectations are very bullish for palladium,” said Frank Holmes, the chief executive officer of San Antonio-based U.S. Global Investors Inc., which oversees $1.8 billion of assets. “Inventories for palladium in Russia have dwindled down, and on the demand side, we have emerging-market growth in auto sales.”

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