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. Last Updated: 07/27/2016

Palladium Hits Record Despite Norilsk Pledge

LONDON — Palladium prices galloped to fresh all-time highs Friday as consumers pursued metal amid uncertainty over exports from top supplier Russia, despite a Russian pledge that steady shipments would start in January.

Norilsk Nickel, Russia’s sole producer, said it would start shipping significant volumes of metal to Japanese consumers under term contracts in January 2001.

But the metal’s price held firm, setting a new record high to fix at $902 a troy ounce in the afternoon, as the market remained skeptical over Russian sales. At the European close, spot metal was at $900/$915, up from Thursday’s $895/$910 New York close.

In New York, NYMEX March palladium held steady at the open at $900 an ounce, and traders said they could not predict where it would go in this uncharted region.

Russia produces around two-thirds of the world’s palladium and supplies have been erratic since 1997. Fears that 2001 will be no different could push prices even higher by the year’s end, with some speculating the metal could reach $1,000, especially since Russian palladium holders have now used up their 2000 quotas.

In previous years, the central bank and the state precious metals and gems repository, Gokhran, also exported platinum group metals.

But this year officials have not mentioned any palladium sales from the state reserve — confirming assumptions that Norilsk was the sole exporter.

While the assumption is that the state didn’t export, dealers said there was also talk that some or all of the central banks’ supposedly large palladium stocks had been transferred to Gokhran and could be used as collateral for loans.

The central bank does not comment on its holdings, and Gokhran head Valery Rudakov said in November he had no such information.

But since the government has made no provisions for a payment of around $3 billion to the Paris Club of creditor nations next year, the question is whether this metal will appear on the market to raise these funds.

"Speculators are entering the market and betting on this and it’s helping to push up the price," said a dealer.