Palladium weekly special report based On 1.00 Lot Calculation:
PALLADIUM USE AND MARKET SHARE:
- Palladium is mostly used in catalytic converters by the car industry to reduce harmful gas emission, while tightening regulation is forcing auto makers to put more of Palladium into each vehicle, which in turn could keep demand outlook positive. Palladium has been also used in fuel cells to generate power.
- MARKET SHARE (PRODUCERS): Russia is the largest producer holding 43% of the markets, while South Africa is the second largest with 33.00% of the markets. Canada is third on the list with 9.5% of the global production.
- MARKET SHARE (CONSUMERS): China is the largest Palladium consumer with 31%, while Europe and North America (USA) hold 20% each. Japan stands at 11%.
- EXPECTATIONS FOR PALLADIUM (2022): The global auto industry is expected to increase demand for Palladium by 8.5% from 8.2 to 8.9 million ounces. Meanwhile, China is expected to increase demand for Palladium to a record high of more than 2.5 million ounces in 2022.
RUSSIA- UKRAINE WAR AND RUSSIA AGAINST THE WEST ECONOMIC WAR:
- RUSSIA- UKRAINE WAR: President Vladimir Putin announced an attack on Ukraine on February 24, days after he recognized two breakaway regions of Russia’s neighbor as independent. Attacks are occurring in Kyiv, Odessa, Mariupol and other locations in Ukraine. Russia faced tough sanctions by the EU and the US and other allies, which brought the country to the brink of sovereign debt default.
- UKRAINE's COUNTER-OFFENSIVE (Early September 2022): Ukraine’s counter-offensive has liberated large swathes of Ukraine from the Russian occupiers. It is possible Russia could retaliate with counter-sanctions that include banning the export of Palladium to the West.
- BREAKING NEWS (APRIL 8): THE LARGEST PALLADIUM AND PLATINUM MARKET IN THE WORLD SUSPENDS DELIVERY OF RUSSIAN REFINED PALLADIUM AND PLATINUM. This could limit the access to the Palladium and Platinum market, which has been already under pressure due to the Russia-Ukraine war and it could result in higher Palladium and Platinum prices. Russia is the second largest Platinum producer in the world providing around 12% of global supply and the largest Palladium producer in the world providing around 45% of global supply
ANALYSIS:
- CHINA VEHICLE PRODUCTION Year-To-Date (November): Passenger vehicle production for January to November totaled 24.628 million units, already higher than the 21.410 million passenger cars produced in 2021, with one more month to go.
- G-7 COUNTRIES US, UK, JAPAN, CANADA DECIDED TO BAN GOLD IMPORTS FROM RUSSIA. The risk remains that countries could target other markets like Copper, Nickel and Palladium.
- TECHNICAL ANALYSIS: PALLADIUM SEES STRONG SUPPORT AT $1700: Since November 2019, the level of 1700 had been only twice breached, and this is the third time. The first time was during the Pandemic (2020 = Low of $1352.60), and the second time was right before the war in Ukraine began (December 2021 = Low of $1529). (Chart below)
- NEWS: After protests around China, the Chinese government has been softening and eliminating its COVID policies which were weighing on the economy. The softening of restrictions is positive for industrial metals including Palladium.
- RECENT PRICE ACTIONS: PALLADIUM HAS HAD A DOWNWARD CORRECTION OF OVER 50% (FROM ALL- TIME HIGH OF $3409 TO $1647). Palladium currently trades around $1700, and if a full recovery followed to its recent all-time high, this could be an upside over 100%. However, it could also decline further.
Source: Fortrade Research Department, Palladium Contract at Fortrade, March 2018 to Present
PALLADIUM, December 20, 2022
Current Price:1,700.00
|
PALLADIUM |
Weekly |
|
Trend direction |
|
|
2,500.00 |
|
|
2,250.00 |
|
|
2,000.00 |
|
|
1,600.00 |
|
|
1,500.00 |
|
|
1,400.00 |
Example of calculation base on weekly trend direction for 1.00 Lot1
|
Pivot Points |
||||||
|
Profit or loss in $ |
80,000.00 |
55,000.00 |
30,000.00 |
-10,000.00 |
-20,000.00 |
-30,000.00 |
|
Profit or loss in €2 |
75,421.89 |
51,852.55 |
28,283.21 |
-9,427.74 |
-18,855.47 |
-28,283.21 |
|
Profit or loss in £2 |
65,854.46 |
45,274.94 |
24,695.42 |
-8,231.81 |
-16,463.62 |
-24,695.42 |
|
Profit or loss in C$2 |
109,352.00 |
75,179.50 |
41,007.00 |
-13,669.00 |
-27,338.00 |
-41,007.00 |
1. 1.00 lot is equivalent of 100 units
2. Calculations for exchange rate used as of 08:18 (GMT) 20/12/2022
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