Palladium: Coronavirus does not take down prices – ANZ
PGMs prices have been resilient to the impacts of the coronavirus epidemic in China. The slowdown in auto sales due to disruption and shutdowns in China have not arrested palladium’s price rally, economists at ANZ Research apprise.
Key quotes
“China consumes nearly 25% (2,650koz) of total palladium demand, and 80% of this goes to the auto sector.”
“The exposure of PGMs to the auto sector means prices should be vulnerable to auto production disruptions in China and globally. The COVID-19 epidemic and its consequent factory shutdowns have had an impact on the auto sector, globally. A manufacturing hub and major supplier of parts, disruptions in China affect the global supply chain.”
“We don't expect auto manufacturers’ demand for palladium to be dampened as they race to meet tighter emission regulations in Europe and China. This should ultimately see overall demand remain robust as non-Chinese factories boost output.”