PRESS ROOM
Geopolitical risks fuel palladium’s rally
Friday 04th February '22
We recently highlighted the improved outlook for platinum and palladium as the semiconductor shortage facing the automobile industry eases this year. When we shared this view in January, we stated that markets were yet to price in the improved outlook. Palladium has moved sharply since then but largely due to a different reason. Markets have priced in a geopolitical risk premium in several commodities produced by Russia, i.e., markets are anticipating supply disruption in the event of escalating geopolitical tensions. Russia accounted for around 36% of total palladium mine production in 2021 (according to Metals Focus). Thus, palladium is among the commodities most impacted by geopolitical tensions. We may see more volatility in the asset class as the events on this front unfold in the coming weeks.