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Palladium's collywobbles Posted: Mon, 14 May 2007 [miningmx.com] -- THE level of fund investment in palladium could be "a concern" amid signs of another surplus in the metal during 2007, said Johnson Matthey (JM) which published its annual review published May 14. Palladium in the manufacture of autocatalysts increased 150,000 oz to just over 4 million oz in 2006. However, there was a 435,000 oz decline for palladium in jewellery, a development JM attributed to full manufacturing and retail pipelines. "It is a concern why they [investors] are doing it. But people see the [price] differential between platinum and palladium and are making the assumption that you can switch the two," said Mark Bedford who authored JM's annual review. These comments come as there's further evidence of fears that investment demand was effectively propping up the palladium market. The worry is that funds are invested in palladium as part of a basket of investments. Were the commodity market to soften, it could spell a period of disinvestment. JM acknowledged the reliance of the palladium price on the investment market: "Although the fundamentals of the palladium market are still weak, fund and other investor interest is likely to provide support to the palladium price". In a perhaps hopeful utterance, however, Bedford said new sources of palladium demand may yet be discovered. "I am astounded by demand for palladium. Suddenly, there's a one million oz jewellery market. Who's to say something like that can't happen again?," he said. But in the foreseeable future, palladium supply was expected to increase, particularly from South Africa where output is a function of increased platinum production. Platinum and palladium occurs together in the Bushveld and in some new mining developments there's is relatively more palladium occurance. "There's going to be more palladium produced per ounce of platinum owing to the orebodies," said Bedford. Click Here to subscribe to our daily newsletter
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