Palladium prices have rallied in early morning trading today, up more than 4.6% at the time of writing, after reports that the US asked G-7 members to consider placing sanctions on Russian palladium and titanium. However, it may be difficult to convince other nations to place sanctions on Russian palladium given its dominance as a global supplier, making up around 40% of global supply.
The zinc cash/3m spread on the LME moved into deeper backwardation, suggesting near-term supplies are tightening. The premium of the LME cash contract over the benchmark three-month contract surged to a little more than $58/t yesterday, the strongest it has been since September 2022. The key spread moved into backwardation at the end of last week after remaining in contango for most of the year. Last week, Sibanye Stillwater Ltd. said that it expects operations at its Century zinc mine in Australia to be suspended until mid-November after a bushfire damaged some equipment. Century produced 76kt of zinc last year.
The global zinc market remained in a supply surplus of 127kt in the first eight months of the year, compared to a supply surplus of 418kt a year earlier, data from the International Lead and Zinc Study Group (ILZSG) shows. Total refined production fell by 1% YoY to 9.1mt, while total consumption rose by 2.3% YoY to 9mt between January and August 2024. For lead, total production decreased by around 1.2% YoY to 8.58mt, while consumption fell by 1.4% YoY to 8.57mt over the first eight months of the year. The global lead market witnessed a marginal surplus of 8kt in Jan’24-Aug’24, compared to a deficit of 10kt during the same period last year.