Decline in PGM production increases the price for palladium

14 April 2023 167
Decline in PGM production increases the price for palladium

The palladium price is on an upward trend amid a decline in South African production. 

Statistic Office of South Africa reported a 5% decrease of the country's mineral production in February compared to February 2022. According to the results of January, production showed a positive trend with an increase of 3.3%.


At the end of February, South Africa's overall 3-month production in the mineral industry fell by 0.3% compared to the same previous period of time. Diamond producers showed the worst production dynamics during this time (-23.9%). Production of platinum group metals (PGM) is showing the most significant positive changes with an increase by 4.3%.


South Africa is one of the largest producers of palladium in the world. A decrease in PGM production could lead to an increase in prices for this metal. Nevertheless, the increase in production of platinum group metals could dampen this effect.


Private news from the Tharisa company also points to a rise in prices for platinoids. Mining company Tharisa PLC stated on Thursday that it reduced production of platinum group metals in the first half of the year due to operational problems.

The organization's headquarters in Cyprus reported a 13% drop in production of these metals to 67,000 ounces for six months, compared with a level of 77,400 ounces last year.


The reduction was due to the extraction of an improper quality mine blend. 


Due to problems that occurred in the period from December to February, the forecast for the year production of platinum group metals was lowered by 10%.


After the price broke the downtrend on the D1 timeframe, the palladium price began to correct, forming an ascending channel. 


On the H1 timeframe the price is in the formation of the third ascending wave. A break through the top of the first wave at 1502.00 strengthens the buy signal for the precious metal. 



The short-term prospects for palladium - buying

The target is at the level of 1575.00.

Part of the profit should be fixed near the level of 1545.00.

The stop-loss is at the level of 1440.00.

Bullish trend has a short-term character, so the volume of trade should not exceed 2% of your balance.

This content is for informational purposes only and is not intended to be investing advice.

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