March 4, 2005
Bloomberg
Palladium futures in Tokyo rose by as much as 9.5 percent, the maximum allowed and the biggest fluctuation of any commodity market today, amid expectations publication of industry data from Russia, the world's largest producer, may show lean stockpiles.
Russian President Vladimir Putin signed decrees declassifying data on production and inventory of platinum group metals and diamonds, Interfax reported yesterday. Since the Soviet era, the nation's production figures have been classified as state secrets. Palladium is used in pollution-control devices and jewelry.
``Russia had up to now classed inventories as a state secret and its pending abolishment is expected to show low supplies'' of palladium, Hiroyuki Kikukawa, deputy general manager of research at Nihon Unicom Corp. in Tokyo, said in a telephone interview.
Palladium for delivery in February 2006, the most actively traded contract on the Tokyo Commodity Exchange, rose 60 yen, the most allowed under exchange rules, to 693 yen a gram, or 21,552 yen ($204.40) an ounce, at 1:58 p.m. Singapore time. That's the highest for a most active contract since Dec. 7.
Dollar
A falling yen against the dollar also helped lift the palladium futures in Tokyo, said Nihon Unicom's Kikukawa. Investors buy yen-denominated commodity contracts when the dollar strengthens because commodities are priced in the U.S. currency on international markets, making the contracts a proxy for buying the U.S. currency.
The dollar bought 105.46 yen at 2:01 p.m. in Singapore, 104.95 in late New York yesterday, according to the EBS, an electronic currency dealing system.
Palladium for immediate delivery rose $5,75, or 2.9 percent, to $204.30 an ounce at 1:59 p.m. Singapore time. Yesterday, it gained $11.50 to close $198.50 an ounce. On the New York Mercantile Exchange, palladium for June delivery rose $5.15, or 2.6 percent, to $205, the highest since Dec. 9, 2004.
Palladium, produced by companies including Russia's OAO GMK Norilsk Nickel, has gained 12 percent from a 13-month low in December. It costs less than one-fourth as much as platinum, a rival precious metal.
Spot prices rose 6.2 percent yesterday, the biggest fluctuation of any commodity market, on speculation that automakers and jewelers are stocking up on the cheap supply.
Chinese jewelry buyers who couldn't afford platinum turned to palladium last year, boosting consumption of the metal 24- fold to more than 600,000 ounces, London-based Johnson Matthey Plc, the world's biggest distributor of platinum and palladium, said on Feb. 15.
Palladium prices will rise as high as $300 an ounce this year and fall as low as $135, London-based consulting firm Virtual Metals said on Jan. 12. The metal will average $187, down from $231 last year, Virtual Metals said.
In the London Bullion Market Association's annual survey of expectations for precious-metals prices, Virtual Metals had the most accurate palladium estimate in 2003 and 2004.
The world's biggest movers are based on changes in price and screened for the size of the market and amount of daily trading.
http://www.bloomberg.com/apps/news?pid=10001013&sid=aBUCiNN_dgzA&refer=commodity_futures