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. Last Updated: 07/27/2016

Palladium Hits High on Russian Supply Fears

LONDON — Palladium prices surged to a new high Tuesday as export assurances from key supplier Russia failed to convince consumers that the scarce metal would arrive in the market promptly in January.

Analysts said a combination of steady consumer demand and speculative business on the back of market supply worries was behind the move to a new all-time high fix on Tuesday morning at $940 a troy ounce, exceeding the $915 high set Monday.

"I still think it’s mainly speculatorsthere’s … no doubt that skepticism about Russian material remains high and there’s good reason for that," said Kamal Naqvi, analyst at Macquarie. "Everyone’s saying ‘show me the metal,’ and until that happens we will see the price continue to rise."

Russia produces around two-thirds of the world’s palladium and supplies have been erratic since 1997.The market fears that 2001 will prove to be no different.

In an effort to quell market anxiety, Russia’s export agency for platinum group metals, Almazjuvelirexport, said it had offered to renew supply contracts with Japan.

In addition, key Russian producer Norilsk Nickel pledged last week it would start significant shipments of palladium to Japan in January.

"But the market’s not listening, and the more we hear from Russia, the more speculators will come into the market and push the price higher. Our immediate short-term target is $1,000," said Frederic Panizzutti, analyst at MKS Finance in Geneva.