UK Sanctions on Russian Plant Send Jitters Through Palladium – Eddie Spence (Bloomberg News – November 10, 2023)

(Bloomberg) — The cost of borrowing palladium has climbed since the UK imposed sanctions on a key Russian refiner earlier this week, reflecting bets that it may lead to supply disruptions.

Britain on Wednesday announced sanctions on Krastsvetmet JSC, which is the main refinery used by top palladium producer MMC Norilsk Nickel PJSC. If Western companies seek to avoid products processed at the refinery in response to the sanctions, Norilsk — which accounts for about 40% of global output — may struggle to find a more palatable alternative.

The news has left the palladium market flashing conflicting signals. On the one hand, spot prices dropped to a five-year low, extending a months-long slide driven by global economic headwinds and tighter monetary policy. It traded down 3.2% at 10:23 a.m. in London on Friday.

However, the interest charged to borrow palladium metal for six to 12 months rose from 0.1% on Wednesday to about 0.6% on Thursday, according to traders familiar with the matter.

For the rest of this article: