How high will palladium prices surge? [Ryuji Sato]

Ryuuji Sato Profile

Sato Ryuuji. Born in 1968. After graduating from a U.S. university in 1993, he joined Genesis Corporation (later Oval Next Co., Ltd.), a provider of information on finance and investment, after working at a marketing company. He writes analyst reports on macroeconomic analysis, currency, commodities, and stock markets, and engages in trading. Since 2010, he has founded H-Square Co., Ltd., writes analyst reports, plans and publishes works such as the “FOREX NOTE Currency Handbook,” and serves as a host for investment-related radio programs. Individual trader. International Federation of Technical Analysts – Certified Technical Analyst. Main anchor on Radio Nippon “The Money Dosato's Market Forecast” (Mondays 15:00–).

Official site:Ryuuji Sato Blog

19 Consecutive Years of Supply Shortages

In the September 2017 issue, I stated that it was only a matter of time before palladium and platinum would reach parity, and that historic day arrived in no time. On September 27, the prices of palladium and platinum inverted, and the premium for palladium has continued to widen thereafter. This time, we will forecast the current state and the future of the palladium market.

For those who may wonder, what is palladium? Simply put, it is a precious metal like gold, silver, and platinum, and its main use is in catalytic converters for gasoline vehicles, accounting for about 70% of total demand. Other uses include electronic materials, dental materials, and jewelry materials. The main production regions are South Africa and Russia, which together account for about 80% of production.

Both South Africa and Russia have experienced political instability, and Russia’s economic sanctions have limited supply growth. Meanwhile, rapid motorization in countries such as China and India since the late 1990s has tightened the supply-demand balance, resulting in 19 consecutive years where actual demand has exceeded production, i.e., ongoing supply shortages.