Contradictory signals on the Platinum market – Commerzbank

The largest Palladium producer from Russia has slightly lowered its production forecast for Palladium this year, Commerzbank's commodity analyst Carsten Fritsch notes.

ETF outflows point to a less tight market

"It now expects a range of 2.68-2.73 million ounces (previously 2.7-2.76 million ounces). Platinum production is also expected to be slightly lower than previously forecast at 645-662 thousand ounces (previously 662-675 thousand ounces). This means that the Palladium market could see a slight supply deficit, with the supply deficit for Platinum somewhat larger."

"In its market forecast released in early July, the company had anticipated a balanced Palladium market for this year and a supply deficit of 200,000 ounces for Platinum. This provides only limited arguments for further price increases for Platinum and Palladium. The Platinum ETFs tracked by Bloomberg have reported massive outflows of more than 160,000 ounces since the middle of last week, bringing the net outflows since the beginning of the month to almost 250,000 ounces."

"ETF investors apparently see the significantly higher price level as a selling opportunity. The ETF outflows point to a less tight market. In its current forecast, the WPIC assumes ETF inflows of 100,000 ounces this year. We are currently significantly short of this figure."