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Palladium Market Update:


Palladium Market Update:

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BULL CM
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TD Securities published an update on the palladium market this morning. They talk about the reasons for why Palladium prices continue to make fresh all-time highs. They conclude that it is fundamentally driven by a supply/demand crunch.


Highlights from the TD Securities report with a link to the full report below:



  • Increasingly tight emissions control regulations will see South Korea, India, China and Europe all raise their standards in 2020. These regulatory changes are part of a growing global trend toward sustainability (ESG), which will continue to increase demand for emission control devices containing palladium.

  • A potential rebound in auto sales, after one of the most prolonged periods of contraction on record, could also drive demand higher. South African power outages and unavailability of inventory represent upside risks. Given the improved demand outlook, the chronic deficit is likely to get worse and make it difficult for the market to clear at lower prices.

  • We see little evidence of excesses in spec activity, which suggests the rally is fundamentally-driven, despite the parabolic move. In fact, our dry-powder analysis suggests that traders hold a below-average total position, and positions per-trader are also below-average, thereby reducing the risk of a sharp reversal. We think the rally has room to run, as periods of extreme scarcity send prices sharply higher. No substitutes imply that near-term demand will not be destroyed.


Join Canadian Palladium Investor Group


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Thumb canadian palladium logo
BULL CM
Moderator

TD Securities published an update on the palladium market this morning. They talk about the reasons for why Palladium prices continue to make fresh all-time highs. They conclude that it is fundamentally driven by a supply/demand crunch.

Highlights from the TD Securities report with a link to the full report below:

  • Increasingly tight emissions control regulations will see South Korea, India, China and Europe all raise their standards in 2020. These regulatory changes are part of a growing global trend toward sustainability (ESG), which will continue to increase demand for emission control devices containing palladium.
  • A potential rebound in auto sales, after one of the most prolonged periods of contraction on record, could also drive demand higher. South African power outages and unavailability of inventory represent upside risks. Given the improved demand outlook, the chronic deficit is likely to get worse and make it difficult for the market to clear at lower prices.
  • We see little evidence of excesses in spec activity, which suggests the rally is fundamentally-driven, despite the parabolic move. In fact, our dry-powder analysis suggests that traders hold a below-average total position, and positions per-trader are also below-average, thereby reducing the risk of a sharp reversal. We think the rally has room to run, as periods of extreme scarcity send prices sharply higher. No substitutes imply that near-term demand will not be destroyed.

Join Canadian Palladium Investor Group


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