Range : $1,545 - $1,895
Average : $1,711
The prospect of further supply-side disruptions from South Africa from the Unions, coupled with ongoing robust demand from the auto sector looks likely to ensure that platinum prices remain firm in 2013. If, as expected, a number of South African mines go onto care and maintenance, then this potentially could exacerbate supply tightness further. With an improving economic backdrop giving rise to higher global IP — and in particular the growth in HDD catalyst demand for commercial vehicles — this gives scope for strong demand in a supply constrained market, setting the scene for potentially far higher prices than those that we have forecast here.
Range : $675 - $820
Average : $787
We expect palladium to move into a supply deficit of about 450,000 ounces in 2013 as production is mothballed in South Africa, which should ensure that prices remain firm in 2013. As such, we anticipate that palladium will be the best performing commodity in the year ahead. The key issue determining the palladium price outlook as always will be the perennial question over Russian metal sales from stocks and from production. In the case of the former we think that the stockpile is already much depleted and for the latter, given that margins are already slim, there is a distinct chance that Russian metal may be withheld from the market. As with platinum, the price risk is very much to the upside as high production costs have placed a floor under this market.