Palladium and platinum prices soared in recent trading sessions, reflecting the direct effects of heightened geopolitical tensions between Western powers and Russia.
On October 24, palladium prices surged by nearly 10 percent in a single day, reaching approximately US$1,168 per troy ounce. They surged even higher the following day, touching US$1,200 for the first time since since December 2023.
Platinum also experienced an uptick, although a less pronounced one. The metal’s price rose to about US$1,044, marking a five month high, although it pulled back after.
Over the past two months, the sister metals have seen considerable volatility. In late August, palladium reached a seven-year low of US$835. Its price following this recent surge represents an over 40 percent recovery from that low. Platinum has also followed a positive trajectory, recovering from levels of around US$900 during the same period.
Potential for G7 trade sanctions on Russian palladium drive price volatility
The rise in palladium prices can be attributed to the US Treasury’s call for stricter sanctions on Russian precious metals, which include both palladium and platinum.
The US recently proposed to its Group of Seven (G7) partners that they consider sanctioning Russian exports of key metals, including palladium and titanium.
A similar situation in December last year — when the UK banned certain Russian metal imports — saw an even larger price reaction, with palladium jumping around US$300, or 30 percent, within just five days.
It is worth noting that Russia is a major global supplier for the metals, accounting for approximately 40 percent of palladium and a significant portion of platinum production.
As the war in Ukraine continues, the US and its allies are concerned about the implications of Russian exports on global supply chains.
If G7 sanctions on Russian palladium exports were to materialize, the impact on the US market would be substantial.
Currently, the US is already facing a shortage of physical palladium, with domestic production unable to meet the demand, especially as Sibanye-Stillwater(NYSE:SBSW), one of the largest US sources of palladium, is planning to halve its platinum and palladium production at its mine in Montana next year.
Recycling palladium has not yet filled this gap, and much of the existing supply from South Africa has been accounted for, leaving few alternative sources for US consumers.
While G7 nations would face enforcement challenges due to the potential fallout across automotive, electronics and other palladium-dependent sectors, the possibility alone is reshaping market expectations
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